Indian bonds flattish as oil spike offset by falling Treasury yields
Oil prices reach their highest level in five months, above $114 per barrel, due to fears after Houthi attacks on Saudi Arabia
Indian government bonds remained relatively stable on Friday as investors weighed the impact of soaring oil prices against falling US Treasury yields, while abundant supply kept demand subdued. The surge in oil prices, driven by Houthi attacks on Saudi Arabia, pushed Brent crude above $114 per barrel, reaching its highest level in five months.
As India relies heavily on oil imports, higher crude costs could strain the nation's finances, affect its currency and inflation outlook. Meanwhile, US Treasury yields declined, with the 10-year yield falling below 5%, amidst weaker economic data and concerns over the near-term earnings growth from AI spending. The 6.94% 2036 bond yield in India was at 7.4778% by 10:00 a.m. IST, following a previous session close at 7.4596%.
The yield moves inversely to bond prices. India plans to raise 330 billion rupees through bond sales later in the day. Despite global challenges, India's central bank raised the benchmark repo rate and adopted a calibrated tightening policy stance, indicating potential further policy tightening if price pressures persist. Overnight indexed swap rates in India were stable, with the 1-year OIS rate at 6.57%, the 2-year rate at 6.63%, and the liquid 5-year rate at 6.82%.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
