India bonds sink on oil spike before Fed decision
Indian government bonds experienced a significant decline after a prior rally due to rising oil prices. Brent crude oil prices increased following concerns over supply disruptions in Saudi Arabia. The US 10-year Treasury yield also rose, affecting the attractiveness of Indian debt. Markets are anticipating the Federal Reserve's policy decision and rate outlook, impacting investor sentiment.
Indian government bonds tumbled on Wednesday, reversing most of the previous session's sharp rally, as a fresh jump in oil prices and US Treasury yields rattled investors ahead of the Federal Reserve's policy decision.The benchmark 6.94% 2036 bond yielded 7.4772% at 10:50 a.m. IST, up 4 basis points from its previous close. The 10-year yield had dropped by nearly five basis points on Tuesday, its steepest single-day decline in three months, after failing to breach 7.50%.On the day, Brent crude climbed 1.5% to $115.40 a barrel after an attack on a Saudi Arabian biggest refinery revived concerns over supply disruptions from the conflict involving Iran and its proxies.India, the world's third-largest oil importer, is particularly vulnerable to oil-price shocks.
