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The yield on India’s 10-year government security (G-Sec) climbed to around 7.1%, its highest level in more than three weeks, following a rise in US Treasury yields. Sentiment in the bond market turned more defensive as investors reacted to the sharp move higher in US rates. The US 10-year Treasury yield advanced to a five-week peak of about 4.43% after the Federal Reserve left interest rates unchanged in a closely divided decision, reinforcing expectations that borrowing costs could stay elevated for longer.
The increase in global yields, combined with weakness in the Indian rupee—which slipped to a fresh record low, breaching the 75-per-dollar level—has intensified pressure on Indian bonds. The market has already been under persistent strain in recent weeks due to surging crude oil prices, which continue to fuel inflation concerns and heighten fiscal risks.
