More Stories

Informist, Monday, Apr. 27, 2026

By Diksha Tripathy

MUMBAI – Prices of government bonds recovered most losses to end slightly lower Monday as traders covered short positions in the secondary market, dealers said. An intraday fall in prices of Brent crude oil also helped bond prices, they said.

The 10-year benchmark 6.48%, 2035 bond ended at INR 96.84, a tad down from INR 96.87 Friday, but off the day's low of INR 96.66. Its yield ended at 6.9418%, up from 6.9365% the previous session. Brent crude oil futures for delivery in June were at $105.99 per barrel at 1700 IST, up from $103.75 per barrel at the end of gilt market hours Friday, but down from the day's high of $108.50 per barrel. Brent crude oil prices fell on news report of Iran offering the US a deal which could lead to the reopening of the Strait of Hormuz.   

"We are expecting some peace news (from the US-Iran war), and if that happens, (bond) prices will rise further. Today (Monday), I think there's some buying activity from PSUs (state-owned banks) which drove (bond) prices (up)," a dealer at a private-sector bank said. "It is a good level for them (state-owned banks) to buy."

Bond prices opened lower Monday but trimmed losses through the session as private-sector banks and state-owned banks stepped in to buy gilts in the secondary market as the yield on the benchmark 10-year gilt rose above 6.95%--levels seen as attractive, dealers said. The value-buying kept the rise in the 10-year benchmark yield limited even as no peace deal between the US and Iran over the weekend kept crude oil prices elevated. Some traders expect the yield on the 10-year benchmark bond to fall to 6.90% as a peace deal between the two warring nations is seen as inevitable. The total turnover in the government securities market was INR 441.95 billion, a tad lower than INR 520.20 billion Friday, data from Clearing Corp. of India Ltd. showed. There was no trade using the RBI's wholesale e-rupee pilot Monday. The instrument has been out of use since February. 

The 15-year 6.68%, 2040 bond underperformed those of other tenures ahead of its fresh supply at the weekly gilt auction Friday, dealers said. Post market hours, the government said it would sell INR 170 billion of the 15-year 6.68%, 2040 bond and INR 120 billion of the 50-year 7.43%, 2076 bond Thursday.

Some traders also bought gilts on expectation of scheduled trade talks between the US and India this week to have a positive outcome for bond prices, they said. 

"I've heard in market that some rumour, not news that trade deal, US-India trade deal will be beneficial for India so that's why so much buying in 10-year (benchmark bond)," a dealer at a state-owned bank said.

OUTLOOK

Tuesday, bond prices will track any development in the US-Iran peace talks and its impact on Brent crude oil prices. Traders will also track the movement of the rupee against the dollar and overnight indexed swap rates, they said.

The result of the INR-145-billion auction of state government securities Tuesday will also lend cues to bond prices, dealers said. The notified size of the state bond auction for Tuesday is lower than what traders had expected, which is likely to support demand, they said. Traders expect the auction to go through smoothly on firm demand by public-sector banks, insurers and mutual funds, they said. State-owned banks and mutual funds currently prefer state bonds over gilts of similar maturity, as yield spreads remain elevated, thereby offering higher returns than gilts, dealers said.  

Higher-than-viewed cut-off yields on state bonds at the auction Tuesday could push the yield on the 10-year benchmark up at 6.98%, dealers said. The yield on the benchmark 10-year 6.48%, 2035 bond is seen in a range of 6.92-7.00%.

India Gilts:Recover most losses as oil price eases, traders cover short bets

MUMBAI--1612 IST--Prices of government bonds recovered most losses nearing the end of trade as Brent crude oil prices were off the day's high, and traders covered short bets, dealers said. Along with state-owned banks, private sector banks were also buying gilts, they said. Brent crude oil futures for delivery in June fell below $107 per barrel, after hitting $108.50 earlier in the day. 

"Its just UST (US Treasury yields) and crude coming down, I don't see any other news that's affecting (bond prices)," a dealer at a private sector bank said. 

Traders bet on the US and Iran finalising a peace deal, after news earlier in the day that Iran gave the US a fresh proposal to open the Strait of Hormuz and postpone nuclear negotiations. Dealers also speculated that trade talks scheduled between India and the US could have a positive outcome for bond prices, they said. 

Some traders got "short squeezed" in the 10-year benchmark 6.48%, 2035 gilt, dealers said. A proxy for tracking short sales in a particular bond is the number of trades in the paper in the special repo segment of the Clearcorp Repo Order Matching System. The data at 1612 IST showed trades worth INR 98.54 billion in the gilt, down from INR 100.30 billion Friday. The rate on the bond last traded at 0.01%, as traders lent funds at low rates to cover their short sales on the bond. 

For the rest of the day, the yield on the 10-year benchmark 6.48%, 2035 bond is seen in the 6.92–6.98% range. At 1612 IST, turnover in the gilt market was INR 368.35 billion, lower than INR 412.75 billion at 1630 IST Friday, according to data from the RBI's Negotiated Dealing System–Order Matching platform. (Cassandra Carvalho)

India Gilts: Inch lower as Brent at nearly 3-week high; traders on sidelines

MUMBAI--1334 IST--Prices of government bonds fell further during the day as Brent crude oil futures for delivery in June rose to $108 per barrel, the highest since Apr. 7, from $106 at 0900 IST. After there was no progress in peace talks between the US and Iran over the weekend, traders refrained from taking aggressive bets and were on the sidelines, dealers said. 

Value-buyers, especially state-owned banks, stepped in to buy gilts at levels seen attractive, limiting losses as the yield on the benchmark 10-year 6.48%, 2035 gilt rose to the day's high of 6.9679%. 

"It all depends on this West Asia crisis. I think we're in a range of 6.88% (yield on the 10-year benchmark) to 7.00%, I think we're more likely to go to 6.90%. Even if we go to 7.00% I think it'll go to 6.98% maximum, not 7.00%," a dealer at a state-owned bank said. 

Some traders began placing short bets on the 6.68%, 2040 gilt ahead of fresh supply of a 15-year gilt at the auction Thursday, they said. The bond last traded 23 paise lower at INR 94.52. However, the trade was centred in the liquid 10-year benchmark gilt amid uncertainty, and as its yield traded in the middle of the current trading range and traders took opposing views on where the yield is headed, they said. 

The notified size of the state bond auction for Tuesday is lower than what traders were expecting, at INR 145 billion, which boded well for bond prices, they said. State-owned banks and mutual funds currently prefer state bonds to gilts of similar maturity, as yield spreads remain elevated, thereby offering higher returns, they said.  

For the rest of the day, the yield on the 10-year benchmark 6.48%, 2035 bond is seen in the 6.92–6.98% range. At 1334 IST, turnover in the gilt market was INR 237.45 billion, tad higher than INR 176.20 billion at 1330 IST Friday, according to data from the RBI's Negotiated Dealing System–Order Matching platform. (Cassandra Carvalho)

India Gilts: Down on rise in crude oil prices; PSU banks' buys limit fall

MUMBAI--1014 IST--Prices of government bonds were down Monday due to a rise in crude oil prices, dealers said. However, purchases by state-owned banks in the secondary market in early trade limited the fall in bond prices, they said.    

Brent crude oil futures for delivery in June were at $106.58 per barrel at 0930 IST, up from $103.75 per barrel at the end of gilt market hours Friday, due to lack of peace talks between the US and Iran over the weekend. In early trade, volumes in the secondary market remained thin on uncertainty over the end of the West Asia war due to fading chances of resolution between the two warring nations, dealers said.

"It (fall in bond prices) is mostly the impact of crude (rise in oil prices) and rupee movement. On Friday, there was some overextended covering (of short bets) in the latter half so this is just some correction," a dealer at a private-sector bank said. The rupee depreciated 1.4% against the dollar last week and the Reserve Bank of India has sold dollars in the spot market, including on Monday, to prevent a further fall, dealers said. 

However, the fall in bond prices was limited as state-owned banks likely purchased gilts in the secondary market, dealers said. State-owned banks were the largest net buyers of gilts Friday with purchases worth INR 48.33 billion, according to Clearing Corp. of India data. Some banks considered the 10-year 6.48%, 2035 gilt lucrative as its yield topped 6.95% and moved towards 7% and may be adding bonds to their held-to-maturity portfolios at current levels, dealers said.

For the rest of the day, the yield on the 10-year benchmark 6.48%, 2035 bond is seen in the 6.93–7.00% range. At 1014 IST, turnover in the gilt market was INR 82.25 billion, similar to INR 86.85 billion at 1030 IST Friday, according to data from the RBI's Negotiated Dealing System–Order Matching platform. (Diksha Tripathy)

India Gilts: May fall as oil climbs on lack of US-Iran peace talks

NEW DELHI – Government bond prices are likely to fall Monday, reversing a recovery late Friday that took place after reports stoked hopes of peace talks between the US and Iran on the weekend, dealers said. With no talks taking place, Brent crude futures for June delivery rose to $106.45 a barrel at 0838 IST from $103.83 per barrel at 1700 IST Friday.

The yield on the 10-year benchmark 6.48%, 2035 bond is expected to open around 6.96% and is seen in a range of 6.92-7.02% during the day, dealers said. Friday, the bond had ended at INR 96.87, or 6.9365% yield. Bond prices were sharply down through the day, but several liquid bonds ended higher after reports that an Iranian delegation was headed to Pakistan. 

Both sides seem to have hardened their stance on a peace deal over the weekend. Tehran has demanded codified control over the Strait of Hormuz and reportedly put its nuclear programme off the table for the negotiations. Meanwhile, US President Donald Trump said he would not send negotiators to Pakistan unless the Iranian side communicated a firm commitment to his conditions for talks over the phone. The uncertainty over the eruption of military action again during the ongoing ceasefire between the two countries is likely to keep risk appetite for gilts low, dealers said. 

Back home, traders and banks have significant room in their portfolios for bonds but don't want to add to risk despite the maturity of INR 1.56 trillion of gilts this month and the Reserve Bank of India's significant gilt purchases in financial year 2025-26 (Apr-Mar). The relaxation of liquidity coverage ratio norms starting Apr. 1 has already reduced the need for banks to stock up on high quality liquid assets such as gilts, dealers said. At the same time, state-owned banks are expected to step up purchases as the 10-year gilt's yield approaches 7.00%, seen lucrative, they said. The easy liquidity conditions in the banking system are currently aiding appetite for gilts, with government spending this week likely to put the Reserve Bank of India's net liquidity absorbed – a proxy for the systemic liquidity surplus – over INR 3.5 trillion.

On the other hand, traders do not expect support from foreign portfolio investors as seen last week, which was likely linked to the entry of a Canada-based foreign investor into the gilt market, dealers said. After being net buyers of fully accessible route bonds for six straight sessions, FPIs sold INR 16.43 billion of these bonds on Friday, according to Clearing Corp. of India data. Traders are also cautious before the outcome of the US Federal Open Market Committee Wednesday, where the panel is expected to hold rates but US Federal Reserve Chair Jerome Powell is seen flagging inflationary risks in potentially his last meeting at the head of the committee.  (Aaryan Khanna)

US$1 = INR 94.19

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.