Indian bonds may extend losses with no let-up in bad news facing them

Indian bonds, the worst performer this month among Asian peers, may extend losses with no let-up in the bad news facing them.

The benchmark 10-year debt had sold off Wednesday evening after S&P Global Ratings warned of a downgrade, dealing a blow to an already frail sentiment. The Reserve Bank of India’s shock hold on rates last week led to the worst weekly fall in bond prices in more than one-and-a-half years.

S&P’s red flag adds to lingering concerns about a wider fiscal deficit, rising inflation, volatile oil prices and the absence of bond purchases by the RBI. Retail inflation accelerated to