Indian government bonds suffered a sharp sell-off on Friday, with the benchmark 6.94% 2036 bond yield ending the session at 6.7799%.
The move marked the largest weekly increase in yields for the instrument in eight weeks, signaling a rapid repricing of risk among domestic fixed-income investors.
Equity markets recently endured their steepest decline since March, with the Nifty 50 index falling more than 2% amid resurgent geopolitical tensions in the Middle East.
The decline in bond prices was driven by a confluence of rising oil prices and persistent uncertainty regarding India’s potential inclusion in major global bond indices.
Higher energy costs threaten to widen the country’s current account deficit and complicate the central bank’s inflation outlook, while index-entry ambiguity has left foreign investors cautious about committing fresh capital to the sovereign debt market.
This development follows a period of heightened volatility across Indian financial markets.
Equity markets recently endured their steepest decline since March, with the Nifty 50 index falling more than 2% amid resurgent geopolitical tensions in the Middle East.