The yield on India’s 10-year G-Sec hovered around 6.8%, stabilizing after four consecutive weeks of declines as lower crude oil prices and strong foreign inflows supported bond demand.
Yields remained under pressure after Brent crude fell 1.9% to $79.04 per barrel, following Iran's export waivers under its interim agreement with the US. However, further declines were limited by uncertainty over the US-Iran truce and renewed concerns surrounding the Strait of Hormuz.
Investors also weighed El Niño-related risks to inflation and growth, while elevated global yields following the Federal Reserve's hawkish stance added caution.
Foreign investors have purchased INR 213.5 billion of Indian bonds this month, a 15-month high, supported by the RBI's June 5 measures to boost inflows and recent tax cuts.
Markets are also awaiting Bloomberg Index Services' decision on the potential inclusion of Indian debt in its Global Aggregate Index, which could further strengthen overseas demand.
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