RBI's MPC hiked the repo rate by 25 basis points to 5.5 per cent from 5.25 per cent.
The US 10-year Treasury yield has climbed to 5.32 per cent from 4.15 per cent at the end of 2025, a rise of 117 basis points (bps) so far in 2026. Brent crude oil, meanwhile, is testing $100/bbl mark.
The 5-10 year yield gap is expected to narrow as the RBI drains surplus cash, pressuring shorter maturities
The planned issue comes two weeks after Reliance raised ₹12,000 crore through five-year bonds, as the conglomerate accelerates its planned mega fundraising
Asian equities were mixed as investors weighed rising bond yields, West Asia tensions and prospects for US-China talks, while the dollar retained safe-haven support
Bond traders expect yields to rise as the RBI drains excess liquidity amid higher oil prices, rising inflation and heavy government debt supply
Analysts attribute this to a weak demand for long-term capital in the country
Growing inflation fears and expectations of monetary tightening by central bankers due to the spike in global oil prices are among the key drivers of the yields.
India's first blue bonds are nearing the market, with Sagarmala Finance and Vadodara seeking funds for maritime and water infrastructure, while testing investor appetite for a new asset class
India, Wood wrote, continues to benefit from improving domestic fundamentals, with bank credit growth accelerating to 17-18 per cent year-on-year in 2026.
The balance of risk improved as downside risk to growth declined along with upside risk to inflation, according to Gaura Sengupta, chief economist at IDFC First Bank
Despite markets continuing to price in policy rate hikes over the next 6-12 months, the softer-than-expected tone of the policy has supported bond markets, said Deepak Agrawal, Kotak Mahindra AMC.
Turnover in the five-year swap, a key gauge of policy rate expectations, jumped to a record ₹25300 crore ($2.65 billion) on Wednesday, breaking past ₹23,600 crore notional contracts clocked on Tuesday
The investment bank said easing inflation expectations, lower oil prices and reduced fiscal risks have improved the outlook for India's long-dated government securities, particularly 30-year bonds
Overseas investors have stepped up purchases of Indian govt bonds after Centre scrapped taxes on debt investments and relaxed ownership limits, improving market's appeal and supporting capital inflows
As per report, Indian economy is entering phase that will require significantly higher levels of long-term capital, but existing debt market is not capable of efficiently meeting those financing needs
Premium rose steadily after HDFC secured tightest-ever spread for an Indian lender
Benchmark 6.94 per cent 2036 yield seen at 6.85-6.90 per cent after US rate-hike signals lift Treasury yields
The important question is whether or not there will there be an about turn in the flow of funds in the debt segment? This is something which will be tested in the coming months.
It is the behaviour of a central bank preparing for a period of external stress, said Sujan Hajra, chief economist and executive director, Anand Rathi Group