Indian government bonds traded in a narrow range on Monday, with the benchmark 6.94% 2036 note closing at a yield of 6.8473%.
The market showed little directional conviction as investors balanced conflicting pressures from global geopolitical risks and domestic liquidity constraints.
The lack of movement reflects a standoff between two dominant market forces.
On one side, lingering uncertainty surrounding the U.S.-Iran truce continues to cast a shadow over risk appetite, particularly given the strategic importance of the Strait of Hormuz for global energy flows.
On the other, a persistent liquidity crunch within the Indian banking system has dampened demand for fixed-income assets, limiting the ability of investors to bid up prices despite the geopolitical backdrop.
This cautious stance follows a week where Indian bond markets were already bracing for renewed friction between the United States and Iran.