India 10Y Yield Rises on Oil Spike

The yield on India’s 10-year G-Sec rose to around 6.9%, extending gains from the previous week as a sharp rise in oil prices and renewed geopolitical tensions triggered broad-based selling in domestic bond markets. Sentiment weakened after Brent crude jumped over 7% to $102.2 per barrel, following the US move to begin a blockade of all maritime traffic entering and exiting Iranian ports after weekend talks failed to reach a peace deal, raising fears of renewed supply disruptions through the Strait of Hormuz. The selloff was further amplified by foreign portfolio outflows, with overseas investors continuing to trim exposure to local debt amid uncertainty over growth and inflation dynamics. Traders now expect the benchmark yield to trade in a 6.85%–7.00% range, as markets remain closely attuned to oil price movements, capital flows, and evolving geopolitical risks.

The yield on India’s 10-year G-Sec rose to around 6.97%, extending gains for another session, as investors reassessed inflation risks following a rebound in crude prices. Brent crude climbed toward $97 per barrel amid renewed doubts over the US-Iran ceasefire and potential disruptions in the Strait of Hormuz, prompting a reassessment of India’s import cost pressures. Traders noted that yields had eased in the previous session after the ceasefire news, but that move has since reversed as volatility in oil markets returned. Market participants also pointed to positioning ahead of the upcoming 10-year government security auction, with some fresh short positions building in anticipation of supply. The Reserve Bank of India is scheduled to conduct a government securities auction worth INR 34,000, which has added to cautious sentiment in the bond market as investors factor in near-term supply pressure.

The yield on India’s 10-year G-Sec slipped to around 6.9%, extending losses for the third session to reach a two-week low after the Reserve Bank of India kept its benchmark policy repo rate unchanged at 5.25% and maintained a neutral policy stance. The central bank also signaled its readiness to curb excessive volatility in the rupee, reinforcing investor confidence, while projecting economic growth at 6.9% and inflation at 4.6% for the current financial year. Further downward pressure on yields came from easing oil prices and improved global risk sentiment following a two-week ceasefire agreement between President Donald Trump and Iran. The development reduced concerns over supply disruptions linked to the reopening of the Strait of Hormuz, with Brent crude falling more than 13% to below $95 per barrel.