India 10-year bond yield crosses 7% as oil prices soar
Rising Brent crude nears $110 per barrel, pushing Indian government bonds to a three-month high of 7.02%. The sell-off hit the five-year bond the hardest with a 10 basis point jump.
Indian government bonds fell sharply this week, driven by surging oil prices and elevated US Treasury yields. The benchmark ten-year yield climbed past 7%, reaching 7.0233% on Friday and marking its highest level in over three months. This decline wiped out gains investors had made following the central bank's June measures to attract foreign capital. Brent crude oil neared $110 a barrel in Asian trade before easing to around $103, having gained more than 7.5% during the past week due to fears of supply disruptions. The oil rally rattled global debt markets and drove US yields up as investors repriced inflation risks, with the ten-year Treasury hovering near 4.97%. While the ten-year yield added roughly 6 basis points this week, the five-year bond led the selloff, jumping 10 basis points to reach 6.6202%. Market pressure increased following these moves as investors adjusted positions across both Indian and US markets.
