The yield on India’s 10-Year G-Sec rose to around 6.73%, reaching one-week highs as renewed Middle East tensions lifted crude oil prices and US Treasury yields, weighing on demand for sovereign debt.
Brent crude extended its recent rally after the US launched fresh strikes on Iran and revoked a license allowing Iranian crude sales following attacks on commercial vessels in the Strait of Hormuz, heightening concerns over energy supplies and inflation.
Meanwhile, the yield on the 10-year US Treasury note climbed to 4.565%, its highest level in nearly a month, adding upward pressure on Indian yields.
Despite the selloff, sentiment remained supported by sustained foreign inflows, with overseas investors purchasing a net INR 362 billion of government securities since the start of June under the Fully Accessible Route.
Earlier this week, improved monsoon conditions narrowed the cumulative rainfall deficit to 24% as of July 5 from 43.1% a week earlier, easing inflation concerns.
