Business Recorder
MUMBAI: Indian government bonds jumped in early deals on Wednesday, with the 10-year benchmark bond yield sliding to its lowest level in three weeks as oil prices fell for a second consecutive session with rising bets about a resolution between the US and Iran. India’s benchmark 6.48% 2035 bond yield was at 6.8858% as of 10:05 a.m. IST, after ending at 6.9355% on Monday. Earlier in the day, the yield eased to 6.8751%, the lowest level since March 25. Indian markets were closed on Tuesday for a local holiday. “The move in bonds will dance to the tunes of any successful peace talks between the two warring nations, but we would need continuous buying momentum through the day with 6.90% as the central point of contention,” the trader said. Oil prices dropped further on Wednesday as traders hoped that the US and Iran may eventually release supply from the key Middle East producing region that has been trapped by the closure of the Strait of Hormuz. Talks to end the US and Israel’s war with Iran could resume in Pakistan over the next two days, US President Donald Trump said on Tuesday, after the collapse of negotiations over the weekend prompted Washington to impose a blockade on Iranian ports. The war has shut the Strait of Hormuz, a key waterway for crude and refined product flows out of the Persian Gulf to global buyers, particularly in Asia and Europe. Higher oil prices are detrimental to India, which largely depends on imports to meet its requirements, and have pushed up bond yields and dragged the local currency lower since the war started on February 28.
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