Indian government bonds experienced a dip on Tuesday as a global debt sell-off, driven by rising US Treasury yields and energy concerns, affected local markets, though dips attracted buy-in to limit losses.
Indian government bonds drifted lower on Tuesday as a global debt sell-off spilled into local markets, although buying on dips helped limit the losses.
The benchmark 6.94% government bond due in 2036 ended the session at 6.9581%, compared with 6.9452% on Monday. Earlier in the day, it climbed to 6.9653%, its highest intraday level since 11 June, before easing back as traders said state-run banks were likely among those stepping in to buy.
The move came as the U.S. 10-year Treasury yield rose to 4.7860%, its highest since January 2025, after renewed U.S.-Iran tensions pushed oil prices higher and revived inflation worries. Brent crude hovered near $92 a barrel in Asian trading, adding to concern that energy costs could keep borrowing costs elevated. Traders are increasingly watching for how long the pressure can persist, given that the Reserve Bank of India has already had to absorb strong demand for the 2036 benchmark in recent auctions, including a sale on 31 August that raised ₹34,000 crore and drew robust bids.
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