The yield on India’s 10-year G-Sec hovered around 6.9%, edging lower amid renewed buying interest as softer crude prices eased concerns over inflation and fiscal pressure. Sentiment improved after oil retreated on hopes of renewed US–Iran diplomatic engagement, even as uncertainty persisted over the Strait of Hormuz and the durability of the ceasefire approaching its expiry. Downward pressure was supported by expectations that lower energy costs could ease India’s import burden and improve macro stability. However, further declines were limited as volatile oil prices kept inflation risks in focus. Foreign investor outflows persisted, though at a slower pace, with positioning remaining highly sensitive to shifts in crude and geopolitical developments. Overall, yields are expected to remain range-bound within 6.85%–7.00%, as markets look to the Reserve Bank of India’s policy minutes for clearer signals on the inflation-growth outlook.
