Indian government bonds closed flat on Monday, stabilizing after a session marked by volatile trading.
The benchmark 6.94% 2036 bond yield ended at 6.8343%, effectively unchanged from the previous close, as opposing forces in the market neutralized each other.
The stability came despite pressure from equity markets, where a setback in major indices typically drives investors toward safe-haven government debt, pushing yields lower.
However, this demand was offset by a steep fall in oil prices.
As India is a major net importer of crude, lower energy costs reduce inflationary pressures and improve the current account balance, which can support risk assets and reduce the relative appeal of bonds.
Additionally, rising flows of foreign capital into India through the central bank’s schemes provided further support to the rupee and domestic financial markets.