India 10-year bond yield rises amid U.S.-Iran tensions, oil surge
India's 10-year bond yield ticked up to 6.97% on April 24, mainly because rising U.S.-Iran tensions have sent oil prices soaring: Brent crude was up nearly 11% this week to $106 a barrel.
With peace talks stalling and more military activity near the Strait of Hormuz, there's growing worry about inflation for countries like India that rely heavily on imported oil.
India's fuel imports raise inflation risk
Since India imports about 85% of its fuel, pricier oil could mean higher inflation and slower economic growth.
As Kunal Sodhani from Shinhan Bank points out, these trends might shake up inflation forecasts.
The rupee isn't helping either—it slipped further to 94.22 against the dollar on April 24.
Traders eye government ₹32,000Cr auction
With all this uncertainty, traders are focused on the government's upcoming ₹32,000 crore debt auction, which includes bonds with different maturities as part of the government's market borrowing program.