Indian government bonds traded in a narrow range for a second consecutive session on Tuesday, as the four-week rally driven by rising oil prices lost momentum.
The benchmark 6.94% 2036 note saw its yield dip slightly to 6.8378%, down from Monday’s close of 6.8473%.
The market showed little directional conviction, with investors balancing conflicting pressures.
While geopolitical friction between the United States and Iran continues to underpin energy markets, the immediate impact on Indian fixed income is waning.
The Strait of Hormuz remains a critical chokepoint, but the risk premium embedded in bond yields appears to have peaked for now.
This consolidation follows a period of volatility where energy-led repricing pushed Indian bond yields lower.