The yield on India’s 10-year government security climbed to around 6.7%, erasing earlier declines, as traders positioned ahead of fresh debt supply. Market focus has shifted to issuance dynamics, with New Delhi set to auction INR 320 billion of the 2035 benchmark bond on Friday—the final sale of this note for the current fiscal year. The strength of demand and the cut-off yield at this auction are expected to shape bond market direction in March.
Upside in yields was partially restrained by a supportive broader sentiment, underpinned by steady interest in longer-dated securities. Ultra-long bonds, particularly the 30-year and 40-year issues, have continued to attract buying from long-term investors such as insurance companies, buoyed by increased inflows in recent weeks. So far this financial year, yields on 30-year and 40-year bonds have risen by about 45 basis points, compared with a milder increase of around 10 basis points in the 10-year benchmark yield.
