The yield on India’s 10-year G-Sec fell to around 6.8%, extending last week’s decline and hovering near a two-month low as easing geopolitical tensions and a sharp drop in crude oil prices boosted demand for government debt.
Sentiment improved after the US and Iran reached a preliminary agreement to end the conflict and reopen the Strait of Hormuz.
The deal sparked a sharp decline in oil prices, with Brent crude falling 4.5% to $83.40 per barrel, its lowest level since March 10 and far below the conflict-era peak of $120.
Yields were also pressured lower by recent RBI measures aimed at attracting foreign capital, supporting the rupee, and strengthening the country’s external position.
Foreign investors have purchased more than $1.6 billion worth of Indian bonds over the past six trading sessions, while markets are closely monitoring the potential inclusion of Indian government bonds in the Bloomberg Global Aggregate Index, a move that could drive additional foreign inflows.
