The yield on India’s 10-year G-Sec rose to around 6.68%, the highest level in ten months, as government bonds extended their recent slide amid sustained global and domestic pressures. The move reflected spillover from a sharp jump in US Treasury yields, which climbed to four-month highs. Separately, positive supply-side factors failed to stem the sell-off. A steep cut in states’ planned bond issuance for the week did little to lift demand, while intervention by the Reserve Bank of India has offered only limited support. The central bank has bought bonds worth INR 2.54 trillion since December, however traders stated that the impact has been muted as purchases have been concentrated in less liquid securities rather than the benchmark segment. Offshore activity in the OIS market, including persistent paying by foreign investors, also added to the rise in yields, as the five-year OIS rate has risen 12 basis points.
