The yield on India’s 10-year government bond declined to about 6.69%, the lowest level in nearly four months, as stronger US Treasuries, improving monsoon conditions, and steady foreign inflows boosted demand for sovereign debt. Overseas investors remained a key source of support, purchasing a net INR 346 billion of Indian government securities via the Fully Accessible Route over the five weeks since June 1. The 2036 benchmark bond attracted INR 102 billion in inflows, while the 2031 bond drew INR 72 billion, together accounting for more than half of total foreign purchases amid expectations that these securities will be included in the Bloomberg Global Aggregate Index.
Yields were further pressured lower by better monsoon rainfall, which eased concerns about food inflation, and by weaker crude oil prices following OPEC+’s decision to raise production, both of which improved market sentiment. Investors are also awaiting the minutes of the US Federal Reserve’s latest policy meeting for additional guidance on the future path of interest rates.