Indian bond yields climb as oil surge and US Treasury selloff weigh on emerging markets

Rising energy costs and higher US borrowing costs are pressuring Indian government debt, extending the cross-asset volatility triggered by stalled US-Iran peace talks.

By Handelsavisen Newsroom · Automated 2026-07-08 06:23 UTC · 1 min read

Indian government bonds faced selling pressure in early Wednesday trading as a combination of rising oil prices and higher US Treasury yields weighed on emerging market assets.

The benchmark 6.94% 2036 bond yield rose to 6.7246% by 10:00 a.m.

6958%. The selloff reflects broader market anxiety over renewed geopolitical tensions in the Middle East.

IST, up from the previous session’s close of 6.6958%.

The selloff reflects broader market anxiety over renewed geopolitical tensions in the Middle East.

Oil prices have advanced sharply following reports that US-Iran peace negotiations hit an impasse over the weekend, raising fears of supply disruptions in the Strait of Hormuz.

This energy price shock is compounding the pressure on Indian assets, which are already sensitive to import costs given the country’s heavy reliance on crude imports.