India bonds surge as oil cools on US-Iran deal hopes
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Indian government bonds showed improvement as crude oil prices declined, which is expected to boost market demand. Traders are closely monitoring the upcoming US midterm elections for potential impacts on oil prices and economic policies. The falling crude prices are expected to alleviate inflation concerns and fiscal pressures for India. Furthermore, the Reserve Bank of India may adjust its interest rate plans based on these developments.
Indian government bonds rallied early on Monday as falling crude prices revived demand, while traders awaited the US midterm elections for clues on the war, oil prices and the global interest-rate outlook.Brent crude futures slid 3.2% to $109.75 a barrel in Asian trade, pulling back from last week's six-month high after Iranian officials and Qatari mediators held a third straight day of talks aimed at ending the US-Israeli war on Iran.
For India, the world's third-largest oil importer and consumer, lower crude eases inflation concerns, current-account and fiscal pressures, and can help temper expectations of aggressive tightening by the Reserve Bank of India.
Bonds Corner Powered By India bonds surge as oil cools on US-Iran deal hopes
Indian government bonds showed improvement as crude oil prices declined, which is expected to boost market demand. Traders are closely monitoring the upcoming US midterm elections for potential impacts on oil prices and economic policies. The falling crude prices are expected to alleviate inflation concerns and fiscal pressures for India. Furthermore, the Reserve Bank of India may adjust its interest rate plans based on these developments.
FPI G-Sec outflows nearly halve to Rs 5,400 crore in OctoberUS bonds rally, sending yields to biggest monthly decline since 2023Reliance Industries announces fundraising, to raise Rs 15,000 crore through NCDsIndia bonds buckle for fourth straight month on oil's climb Browse all Bonds News withThe benchmark 6.94% 2036 bond yield fell around 5.5 basis points to 7.3612% by 11:30 a.m. IST. Bond yields move inversely to prices. The rupee also strengthened 0.08% to 94.87 per US dollar.
"With crude and the rupee behaving well, market is finding some strength," said Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank.
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Attention is now on US midterm elections.
Traders will gauge whether the result alters the prospects for a ceasefire and sustained oil-price correction.
"There remains a risk of a 50-basis-point December hike if inflation stays elevated, but a peace deal and a meaningful fall in crude could unwind some of those expectations," a private-bank trader said.
The RBI raised its policy rate and shifted its stance in October, signalling further tightening. It expects inflation to peak near 6% in the third quarter.
Rates
OIS rates eased as lower oil prices softened rate-hike concerns.The one-year OIS fell 4.5 bps to 6.6750%, the two-year was down 6.25 bps at 6.6850%, and the five-year pared 6.5 bps to 6.7975%.
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Read More News onIndia government bondsBrent crude pricesUS midterm electionsReserve Bank of Indiaoil prices and inflationjana small finance bank
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
