India 10Y Yields Fall on State Bond Demand

2026-02-23 07:55 By Erika Ordonez 1 min. read

The yield on India’s 10-year G-Sec fell to around 6.67%, retreating from an over one-week high in the previous session, as bond prices firmed on stronger-than-expected demand for state government debt.

A recent state bond auction drew robust investor interest, with total issuance exceeding the planned amount and most cutoff yields coming in below market expectations, signaling solid appetite for longer-duration paper.

On the other hand, state governments are set to raise about INR 445 billion this week, alongside an INR 320 billion auction of the benchmark 10-year bond, keeping upward pressure on the market.

Persistent issuance overhang has reinforced expectations that yields will struggle to move materially lower.

Yields remain sensitive to global developments and oil market pressures, which continue to influence sentiment.

Looking ahead, traders expect the benchmark to remain within a 6.65%–6.78% range, with upcoming auctions and demand absorption key to direction.



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