More Stories

Informist, Monday, Jun. 29, 2026

 

By Janwee Prajapati

 

MUMBAI- Prices of government bonds rose to the day's high at the end of the trading session Monday due to a fall in the 10-year benchmark US Treasury yields, dealers said. Market sentiment remained positive after Brent crude oil prices fell below pre-war levels, dealers said. However, the rise in bond prices was capped as traders took profits at levels seen as attractive, dealers said. Bond prices were little changed after the cut-off at the INR-300-billion bond buyback auction was in line with market expectations, dealers said.       

 

The 10-year benchmark 6.94%, 2036 bond ended at INR 101.33, up from INR 101.21 Thursday. The yield on the bond settled at 6.7515%, against 6.7690% at the end of the previous session. Bond prices appear sticky around the key 6.75% yield on the 10-year benchmark, with dealers saying a fall below this level looks unlikely as traders booked profits near it. On a technical note, if the yield on the 6.94%, 2036 bond falls below 6.75%, traders expect the yield to go to 6.68% which is the next strong resistance level, dealers said. Some traders also expect the yield on the bond to fall to 6.60% if Indian bonds are added to Bloomberg's flagship Global Aggregate Index, dealers said. Traders expect such an announcement in the upcoming month, dealers said. 

 

The total turnover in the gilt market was INR 676.50 billion, down from INR 775.70 billion on Thursday. Trade volume picked up after the extended weekend as sentiment improved due to a lack of escalation in the west Asia war, dealers said. Traders said as long as Brent crude oil continues to trade near pre-war levels, market sentiment will remain positive, which is likely to keep bond prices higher, they said.

 

At 1700 IST, the benchmark 10-year US Treasury yield was below 4.38%, down from 4.39% at 0900 IST, but similar to 4.38% at the same time Thursday. Brent crude futures for August delivery fell to the day's low of $71.83 per barrel from $72.78 per barrel at the end of Indian trading hours Thursday and lower than the closing of $72.87 per barrel on Feb. 27. The gilt market was shut Friday for Muharram.

 

"Bond prices are tracking 10-year US yield and crude oil only...crude has fallen quite a bit so prices are up," a dealer at a primary dealership said. "Long-term bonds (above 15 years) rallied more because of lesser supply and demand from insurance companies and long-term investors. Rate hike fears have also faded which is why we are seeing these (long-term bonds) rally." 

 

 

The 6.68%, 2040 bond was the second most traded bond in the secondary market as traders covered their short positions after missing out on the fresh supply at the gilt auction Thursday, dealers said. At the weekly gilt auction Thursday, of the total notified amount of INR 170 billion of the gilt, INR 169.90 billion of the 15-year benchmark bond was swept off in just four bids, data showed.

 

"The 15-year bond is in favour after the entire auction supply was taken in four bids," a dealer at a small finance bank said. "There were quite a lot of short bets also, which traders are covering...for intraday traders also, these levels are attractive."

 

Robust demand for the 15-year bond was also driven by the foreign inflows after the addition of this bond to the fully accessible route, dealers said. Some traders also placed intraday bets as they expected the yield on the said bond to fall, they said. The 15-year benchmark bond ended at INR 97.29, up from INR 96.93 Thursday. The yield on the bond settled at 6.9866%, against 7.0275% at the end of the previous session.    

 

At the INR-300-billion buyback auction, the RBI set cut-off prices largely in line with the indicative prices published by Financial Benchmarks India Ltd. on Thursday, which matched market expectations, dealers said. However, total bids fell short, with the central bank receiving offers worth only about 26% of the notified amount. The RBI accepted INR 73.88 billion out of INR 76.94 billion in bids received. Among the four securities, the 7.33 26bond saw the weakest response with just 11 offers received. Dealers said participation was muted because some banks did not hold the bonds in their portfolios, while others held only a portion of the gilts on offer, which likely kept overall bids lower.

 

Moreover, the Reserve Bank of India said state governments and Union territories will borrow about INR 3.19 trillion through bonds in Jul-Sept, according to the indicative calendar released late Thursday. The amount notified was on the higher end of the expected range of INR 2.6 trillion-INR 3.2 trillion, dealers said. 

 

OUTLOOK

Tuesday, government bond prices will track overnight movements in crude oil prices and any significant development in the peace negotiations between the US and Iran, dealers said.

 

Traders will also track the result of the state bond auction, dealers said. Five states will raise INR 136 billion at the state bond auction, dealers said. The notified amount is the same as the indicative amount in the Jul-Sept state borrowing calendar. The demand at the auction is likely to be firm due to the small quantum, they said.   

 

Traders will also keep an eye on key US jobs data due later this week and on the tenuous ceasefire between the US and Iran. May's Job Openings and Labor Turnover Survey report, which measures US job openings, is scheduled for release Tuesday. The June nonfarm payrolls report, tracking jobs added last month, follows on Thursday. Investors will closely examine both to assess the strength of the US economy as it will impact the policy rate decisions, dealers said.

 

Some traders also eyed the INR-340-billion of 6.94%, 2036 bond auction Friday, dealers said. Some traders will likely make space in their portfolio for the fresh supply of bonds. Some traders will also place short bets on the bond in order to cover their positions at a lower price at the auction, which will weigh on bond prices.

 

Traders remain optimistic that Indian bonds will be added to Bloomberg's flagship Global Aggregate Index. If the inclusion proceeds, they expect India's Fully Accessible Route bonds to account for 0.8-1.0% of the index. Bloomberg had said in its September consultation note that a weight of 0.7% was under consideration.

 

	MONDAY		FRIDAY
	PRICE	YIELD	PRICE	YIELD
6.48%, 2035	98.0025	6.7718%	97.8500	6.7944%
6.94%, 2036	101.3300	6.7515%	101.2050	6.7690%
6.36%, 2031	99.7300	6.4259%	99.7250	6.4271%
6.68%, 2040	97.2850	6.9866%	96.9300	7.0275%
6.90%, 2065	93.2000	7.4361%	92.7500	7.4740%

---

India Gilts: Off highs on rise in crude oil prices, profit taking caps gains 

 

	1555 IST	PRICE HIGH	PRICE LOW	OPEN	PREVIOUS
6.94%, 2036
PRICE (INR)	101.2725	101.33	101.13	101.21	101.21
YTM (%)	6.7595	6.7515	6.7794	6.7683	6.769

 

MUMBAI--1555 IST--Prices of government bonds were off day's high due to an intraday rise in Brent crude oil prices, dealers said. Brent crude oil prices rose to over $73 per barrel intraday, from the day's low of $71.83 per barrel. Bond prices were little changed after the INR-300-billion bond buyback auction, as the outcome was in line with market expectations, dealers said. Some traders also booked profits at levels seen as attractive, which prevented the yield on the 10-year benchmark 6.94%, 2036 bond from falling below the key 6.75%, dealers said.   

 

At the INR-300-billion buyback auction, the Reserve Bank of India set cut-off prices broadly similar to the indicative prices released by Financial Benchmarks India Ltd. Thursday, which were also in line with market expectations, dealers said. However, the number of offers received by the central bank was only about 26% of the total amount notified. The RBI accepted INR 73.88 billion of the INR 76.94 billion in offers received. Of the four bonds, the 7.33%, 2026 bond was offered the least by participants, with only 11 offers received. Some banks did not participate in the auction as they did not have the securities in their portfolios, while others held only some of the bonds notified for buyback, which likely led to lower offers at the auction, dealers said. 

 

"Cut-offs were fine... in line with view," a dealer at a small finance bank said. "The bids (offers at the auction) were surprising to us... papers were "in-the-money" so we were expecting more bids (offers)." 

 

In the secondary market, apart from the 10-year benchmark 6.94%, 2036 bond, the 15-year benchmark 6.68%, 2040 bond was the most traded, with a trading volume of INR 98.85 billion at 1552 IST. Trade volume in the bond rose as traders likely covered their short positions in the bond after missing out on the fresh supply at the gilt auction Thursday, dealers said. Of the total notified amount of INR 170 billion of the gilt, INR 169.90 billion was swept off in just four bids, data showed.    

 

Traders also await clarity over the peace deal between the US and Iran, which impacted trade volumes, dealers said. At 1555 IST, the volume of the market was INR 520.95 billion, down from INR 654.30 billion at 1530 IST Thursday, data from Clearing Corp. of India Ltd. showed.  (Janwee Prajapati)

---

India Gilts: Up due to fall in US yields; buyback auction result to lend cues

 

	1215 IST	PRICE HIGH	PRICE LOW	OPEN	PREVIOUS
6.94%, 2036
PRICE (INR)	101.3	101.33	101.13	101.21	101.21
YTM (%)	6.7557	6.7515	6.7794	6.7683	6.769

 

MUMBAI--1215 IST--Prices of government bonds were up, tracking a fall in the 10-year benchmark US Treasury yield, dealers said. Market sentiment was positive as Brent crude oil prices fell below pre-war levels due to no major escalation in the West Asia war, dealers said. However, the rise in bond prices was capped as some traders booked profits on their holdings at levels seen as attractive, dealers said. Traders also await the result of the INR-300-billion bond buyback auction, which is likely to lend cues to bond prices, they said.   

 

At 1225 IST, the benchmark 10-year US Treasury yield was 4.38%, down from 4.39% at 0900 IST, but similar to 4.38% at 1700 IST Thursday. Brent crude futures for August delivery fell to the day's low of $71.83 per barrel from $72.78 per barrel at the end of Indian trading hours Thursday and lower than the closing of $72.87 per barrel on Feb. 27, 2026. The gilt market was shut Friday for Muharram. 

 

At the INR-300-billion bond buyback auction, participation is likely to be firm as traders consider current levels as attractive to sell their bonds back to the government, dealers said. Some traders expect the 7.33%, 2026 bond and the 5.74%, 2026 bond to be in focus, they said. Some banks did not participate in the auction as they do not have the securities in their portfolios, while others hold only some of the bonds notified for buyback, dealers said. Traders expect the Reserve Bank of India to set cut-offs broadly in line with the indicative prices released by Financial Benchmarks India Ltd. Thursday, according to the median of an Informist poll. Participants in the poll expect the RBI to accept offers for around the entire notified amount at the auction, with estimates ranging from INR 200 billion to INR 300 billion.

 

"The cut-off will be around FBIL (Financial Benchmarks India Ltd. level)," a dealer at a state-owned bank said. "... The majority of banks do not hold these securities... but those who will participate will be aggressive because the yield on short-term bonds has fallen a lot." 

 

Some traders expect secondary market volumes to pick up after the bond buyback auction. Selling bonds to the government will free up room in their portfolios, prompting them to buy gilts in the secondary market, they said. Market participants are also watching the INR 300-billion buyback result closely for cues on gilt prices. If auction cut-off prices come in above indicative levels, secondary market prices are likely to rise. Any upside, however, is expected to be limited as traders will book profits at attractive levels, dealers said. Quarter-end profit-taking also drove some selling, they added.

 

Traders also await clarity over the peace deal between the US and Iran, which impacted trade volumes, dealers said. However, at 1215 IST, the volume of the market was INR 304.95 billion, against INR 284.90 billion at 1230 IST Thursday, data from Clearing Corp. of India Ltd. showed.  (Janwee Prajapati)

---

India Gilts: Tad dn on profit-booking; clarity awaited on US-Iran peace deal

 

	0929 IST	PRICE HIGH	PRICE LOW	OPEN	PREVIOUS
6.94%, 2036
PRICE (INR)	101.135	101.25	101.13	101.21	101.21
YTM (%)	6.7787	6.7627	6.7794	6.7683	6.769

 

MUMBAI--0929 IST--Prices of government bonds were slightly down as some traders booked profits when the yield on the 10-year benchmark 6.94%, 2036 bond remained near 6.76%, dealers said. The market opened steady due to uncertainty over the US-Iran peace deal, dealers said. Most traders refrained from placing aggressive bets ahead of the INR-300-billion buyback auction, the result of which is expected to lend cues to the market, they said.      

 

Monday, the government will buy back four securities worth up to INR 300 billion – the 7.33%, 2026 bond; the 5.74%, 2026 bond; the 8.15%, 2026 bond; and the 8.24%, 2027 bond. This is the first buyback auction of the financial year 2026-27 (Apr-Mar), despite no allocation for buybacks in the Union Budget for FY27 presented in February. Dealers said the buyback is expected to ease supply pressures and improve liquidity conditions, lending support to bond prices.

 

The volume in the market was low as traders awaited clarity over the peace deal between the two warring nations, dealers said. At 0930 IST, the volume in the market was INR 31.35 billion as against INR 50.70 billion at 0930 IST Thursday, data from Clearing Corp. of India Ltd. showed. The gilt market was shut Friday for Muharram. 

 

"The market is waiting for some clarity about the peace deal," a dealer at a private sector bank said. "There is some caution because of that (West Asia war) and some profit-booking also around 6.76% (yield on the 10-year benchmark bond)." 

 

Bond prices were supported by a fall in US Treasury yields, dealers said. The yield on the 10-year US Treasury note was at 4.39% at 0930 IST, as against 4.41% at 1700 IST Thursday. However, a rise in overnight indexed swap rates weighed on bond prices, dealers said. At 0930 IST, the five-year swap rate was up over 3 basis points at 6.21%. 

 

A rise in Brent crude oil prices above $75 per barrel over the weekend due to escalation in the West Asia war also weighed on bond prices in early trade, dealers said. However, Brent crude oil futures for August delivery have remained at levels similar to end of the Indian gilt market hours Thursday. Traders will closely track any development related to the situation in West Asia during the day, dealers said. The benchmark 10-year 6.94%, 2036 bond is seen in the range of 6.75-6.80% during the day, they said.  (Diksha Tripathy)

---

India Gilts: Seen down amid renewed US-Iran strikes; buyback auction eyed

 

MUMBAI – Prices of government bonds are seen opening lower after renewed attacks between the US and Iran over the weekend likely dampened market sentiment, dealers said. Trading volumes are likely to remain low as traders will maintain caution amid uncertainty about the prospects of a US-Iran peace deal, they said. The result of the government's buyback auction later in the day is also expected to provide direction to the market, dealers said.

 

The 10-year benchmark 6.94%, 2036 bond is seen opening near 6.78% Monday, and is likely to move in a range of 6.75-6.82%, dealers said. The 10-year benchmark 6.94%, 2036 bond had ended at INR 101.21 on Thursday, up from INR 101.11 Wednesday. The yield on the bond settled at 6.7690%, against 6.7832% at the end of the previous trading session. Last week, bond prices rose, with Brent crude oil prices falling almost to pre-US-Iran war levels. 

 

For the week, traders expect the yield on the benchmark 2036 bond to move in the 6.72-6.84% range, with crude oil prices, foreign portfolio flows, and the possibility of India's inclusion in Bloomberg's Global Aggregate Index remaining the key drivers. Dealers remain optimistic that Indian government securities will be included in Bloomberg's flagship bond index. If the inclusion goes through, they expect India's Fully Accessible Route bonds to carry a weight of 0.8-1.0%, compared with the 0.7% weight proposed in Bloomberg's consultation paper released in September.

 

The market will also closely watch the result of the government's INR 300-billion buyback auction Monday. Dealers said the buyback is expected to ease supply pressures and improve liquidity conditions, lending support to bond prices. They also expect strong participation, as most of the securities being bought back are currently "in the money", making them profitable for banks to sell.

 

The government will buy back four securities worth up to INR 300 billion – the 7.33%, 2026 bond; the 5.74%, 2026 bond; the 8.15%, 2026 bond; and the 8.24%, 2027 bond. No security-wise notified amount has been specified. This is the first buyback auction of the current financial year, despite no allocation for buybacks in the Union Budget for FY27 presented in February. In the previous buyback auction held on Jul. 31, the government bought back gilts worth INR 172.50 billion against a notified amount of INR 300 billion.

 

Bond prices will also track movements in crude oil during the day, dealers said. Brent crude futures for August delivery were at $72.49 per barrel at 0800 IST, compared with $72.96 at the close of Indian gilt market hours on Thursday. The domestic bond market was shut on Friday for Muharram. Over the weekend, Brent prices briefly climbed above $75 per barrel after fresh military strikes by the US and Iran, according to media reports. However, the two countries Sunday agreed to halt attacks in the Strait of Hormuz and allow commercial shipping to pass freely, The New York Times reported, citing a US official. Iran has not confirmed such an agreement.

 

The Reserve Bank of India's borrowing calendar for state governments for the September quarter, released late Thursday, is also expected to support sentiment, dealers said. States and Union territories are scheduled to raise about INR 3.19 trillion through bonds during July-September, broadly in line with market expectations of INR 2.60 trillion-INR 3.30 trillion, dealers said.  (Diksha Tripathy)  End

 

US$1 = INR 94.54

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.