Indian bonds join global debt selloff, bruised by oil and US Treasury yields

Business Recorder reported that Indian government bonds lost ground for a fifth consecutive session on Wednesday, as yields on United States Treasuries neared three-year highs and rising oil prices revived inflation worries. The benchmark 10-year US Treasury yield, which the report describes as a global reference for borrowing costs, stood at 4.81%, its loftiest level since November 2023. Traders see the 5% mark as a level that could unsettle global markets further.

Across global markets, the Middle East conflict has pushed energy prices higher and lifted borrowing costs to decades-long peaks. Brent crude futures touched $95 a barrel in Asian dealings, their strongest point in six weeks. India ranks third worldwide as both an oil importer and consumer, leaving it highly exposed to crude price moves.

On the domestic side, the yield on the 6.94% 2036 benchmark bond gained 2 basis points to end Wednesday at 6.9754%, having briefly approached 7% at the open before buyers stepped in. Participants remained wary of holding the bond, with the 10-year yield up about 13 basis points across five sessions. Rising crude prices and higher global yields have also increased bets on tighter monetary policy at home. A 364-day Treasury bill auction on Wednesday cleared at 5.91%, compared with 5.80% a week earlier.