MUMBAI: Indian government bonds are likely to fall at the start of the week, after states announced record borrowing for the current quarter, further dampening investor sentiment. The benchmark 10-year yield is expected to drift in a 6.60% to 6.65% band on Monday, a trader with a private bank said. It ended at 6.6062% on Friday. Bond yields rise when prices fall. Indian states will borrow 5 trillion rupees ($55.56 billion) through the sale of debt in January-March, which would be their highest ever quarterly borrowing. This would also push annual debt sale to an all-time high. “Though some had estimated state borrowing calendar at around this level, broader market was expecting a lower number, and the immediate reaction should be a selloff,” the trader said. Traders have continued selling bonds over the last few weeks, as they remain unsure how the supply would be absorbed at a time when demand from most investor segments is easing. The 10-year benchmark bond yield has risen 11 basis points in the last five weeks. Bonds came under renewed selling pressure after weaker-than-expected demand at a sale of benchmark paper on Friday. Indian bonds entered 2026 with a question mark over appetite for a ramp-up in debt supply, even after a year in which the central bank conducted record debt purchases, infused liquidity, and delivered 125 bps of rate cuts - the steepest reduction in interest rates since 2019. The Reserve Bank of India is due to buy bonds worth 500 billion rupees via the first of three purchases scheduled for January.