Central government securities rose in early trading on Thursday, ignoring higher US Treasury yields. Support came from lower oil prices and stronger foreign demand ahead of possible inclusion in a Bloomberg bond index.
The benchmark 6.94% 2036 bond yield stood at 6.7207% by 11:15 a.m., down from 6.7563% at Wednesday’s close. Bond yields move inversely to prices.
Foreign investors have bought a net 324 billion rupees ($3.40 billion) of bonds since June, helped by tax relief, a steadier rupee and hopes of inclusion in Bloomberg’s Global Aggregate Index.
Goldman Sachs analysts expect foreign inflows into Indian government bonds to increase by $10 billion in 2026, according to a note issued on Wednesday.
Market participants anticipate a decision announcement from Bloomberg Index Services this month.
Sustained overseas buying helped Indian bonds resist pressure from a selloff in US Treasuries ahead of key jobs data, traders said.
The US 10-year yield rose 1.5 basis points to 4.49% in Asian trade after gaining more than 5 basis points in the previous session.
Brent crude stayed near $70 per barrel in Asian trade after the US and Iran ended peace talks in Doha, easing inflation concerns for oil-importing India.
Reserve Bank of India Governor Sanjay Malhotra said at an event in Russia on Wednesday that India is unlikely to raise its official inflation target and may consider lowering it over the long term.
New Delhi plans to sell Rs 34,000 crore of the 10-year note on Friday.
“Underlying demand is strong, but traders could look to book profits before the large supply,” a private-bank trader said.
India’s overnight index swap rates eased on better inflation outlook and foreign demand.
