India's 10-year yield hits Dec 2023 peak as US debt rout, oil spike hurt
Benchmarks Nifty22,622.70-99.25FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return8.71 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return19.29 % Invest NowEnter search…
The Indian government bond market is feeling the heat from escalating US Treasury yields and climbing oil prices. Crude oil has surged, fueled by ongoing fears regarding supply disruptions in the Middle East. In light of this, the Reserve Bank of India has raised its policy rate, signaling a potential tightening of fiscal measures. As a result, forecasts suggest the benchmark 10-year bond yield could hit 7.40%.
Listen to this article in summarized format
Loading...×Indian government bonds were pummelled by an intensifying US debt rout and surging oil prices on Thursday, which compounded pain from the Reserve Bank of India's first rate hike since December 2023 the previous day.Crude oil prices climbed 5% to over $105/barrel in Asian trade while the 10-year US Treasury yield rose more than 6 basis points to 5.34%, near levels last seen in 2002.
India's benchmark 6.94% 2036 bond yield climbed 4.5 basis points to 7.2869%, its highest close in almost three years. After surpassing the crucial 7.25% level, the move triggered stop-loss trades, traders said.
Bonds Corner Powered By India bonds sink deeper on RBI commentary, inflation concerns
Indian government bonds are currently facing notable losses, pushing the 10-year yield to its highest since March 2023. This downturn comes in the wake of hawkish remarks from Reserve Bank of India Governor Sanjay Malhotra about financial stability. Additionally, India's wholesale inflation saw an unexpected rise in September, leading to growing concerns over potential future monetary policy shifts.
Indian bonds slip on higher oil, hawkish RBI governor commentsIndia's benchmark bond breaks 4-day falling streak as value investors returnIndia bonds rise as investors see value after 10-year yield nears 7.40%Bond yields rise to 3-year high on RBI liquidity cut Browse all Bonds News withOil prices spiked on persistent concerns over Middle East supplies, following increased attacks on shipping in the Gulf and Strait of Hormuz, while a hurricane threatened US offshore output. Costlier crude has clouded the global inflation outlook, and complicated policymakers' choices over future rate moves.
On Wednesday, the RBI raised its policy rate by 25 basis points to 5.50% and shifted to a "calibrated tightening" stance, signalling that its next move would either be a hike or a pause.
Live Events
"Given that the MPC has only just begun its hiking cycle and the risk of core rates moving higher, we refrain from adopting a more constructive outlook on Indian government bonds for now," analysts at Standard Chartered Bank said in a note.
"We now expect the benchmark 10Y IGB yield to peak at 7.40% by Q3-FY27 (from 6.80% previously)."
Traders also remain wary of further liquidity absorption by the central bank, a heavy state-borrowing calendar and duration-rich central government supply, all weighing on demand.
RATES
India's overnight indexed swap rates surged as traders sold off debt in US and local markets.
The one-year OIS rate rose 2.5 bps to 6.2750%, the two-year rate gained 2.25 bps to 6.4750%, and the liquid five-year rate jumped 4.5 bps to 6.77%.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onUS debt routIndian government bondsoil prices surgeReserve Bank of India rate hikecrude oil prices
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...moreless(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onUS debt routIndian government bondsoil prices surgeReserve Bank of India rate hikecrude oil prices
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...morelessPrime ExclusivesInvestment IdeasStock Report PlusePaperWealth EditionThe ABCD of the US mid-term elections – Part 1: Why it matters across the globe
Onion inflation at 108%? Yes, but not really. What is different this time?
Curbing rupee bets: What the RBI’s new rules mean for the hedge-now-or-wait question
Brinjal, buffalo, bacteria: Inside India’s pay-for-nature system
Homebuyers wait as NCLT panel picks holes in unfinished Jaypee projects
The NBFC saga - Part 3: How one default in 2018 changed the way RBI reads risk
- 1
- 2
- 3
& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET
Unlock Access to All Exclusives with ETPrime FREE TRIAL
15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers
Trial offer expiring in00 : 05 : 00
I'd rather pay ₹2599 nowUh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
Prime Account Detected!
It seems like you're already an ETPrime member with
Login using your ET Prime credentials to enjoy all member benefits
Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.
Unlock ETPrime's Exclusive Stories Today!
Big Price Drop! Flat 40% Off
Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In nowOffer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail OfferOffer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail OfferSpecial Offer
Get flat 40% off on ETPrime
Avail OfferAvail OfferClaim NowAlready a Member? Sign In nowNeed Assistance?
Connect with an ETPrime expert for personalized support and guidance
+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '' + h3 + '
' + h4 + '
- ' + listing + '
What’s Included with
ETPrime Membership
1Exclusive Insights That Matter
Uncover the truth with our investigative stories
Make strategic moves using the real-world case studies
Read industry-specific stories to identify emerging trends
Spot opportunities with in-depth insights that matter
Trump temper on H-1B visas is forcing Indians to do these things to stay put in US
What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.
Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?
The problem with lab grown diamonds
Why a falling rupee is a better option for the economy
A list of top 20 momentum stocks that have delivered massive returns in one year
2Invest Wisely With Smart Market Tools & Investment Ideas
Alpha Trade
Get daily trade ideas from SEBI-registered research analysts.
Investment Ideas
Grow your wealth with stock ideas & sectoral trends.
Stock Reports Plus
All-in-one stock research with Stock Score, peer comparison & key signals.
BigBull Portfolio
Get to know where the market bulls are investing to identify the right stocks.
Stock Analyzer
Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.
Market Mood
Analyze the market sentiments & identify the trend reversal for strategic decisions.
Stock Talk Live at 9 AM Daily
Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.
3Stay informed anytime, anywhere with ET ePaper
ePaper - Print View
Read the PDF version of ET newspaper. Download & access it offline anytime.
ePaper - Digital View
Read your daily newspaper in Digital View & get it delivered to your inbox everyday.
Wealth Edition
Manage your money efficiently with this weekly money management guide.
TOI ePaper
Read the PDF version of TOI newspaper. Download & access it offline anytime.
Deep Explainers
Explore the In-depth explanation of complex topics for everyday life decisions.
Health+ Stories
Get fitter with daily health insights committed to your well-being.
Personal Finance+ Stories
Manage your wealth better with in-depth insights & updates on finance.
5Enjoy Complimentary Subscriptions From Top Brands
Stream new documentaries from all across the world every day.
Stories you might be interested in
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
