The yield on India’s 10-year G-Sec fell to around 6.75%, retreating from a one-week high as investors bought back government bonds after the previous session’s sharp selloff, with sustained foreign inflows continuing to support demand.
Still, sentiment remained cautious as renewed Middle East tensions kept Brent crude near $79 per barrel, while elevated US Treasury yields weighed on fixed-income markets.
Expectations of tighter US monetary policy also lingered after the Federal Reserve’s latest meeting minutes highlighted persistent inflation concerns, reinforcing the likelihood of another rate hike later this year.
In spite of these pressures, overseas investors remained net buyers of Indian government bonds, purchasing INR 365 billion ($3.82 billion) through the Fully Accessible Route since the start of June, driven by growing expectations that India’s debt will be included in Bloomberg’s Global Aggregate Index.