Speculation over the possible inclusion of Indian government securities on Bloomberg’s global bond index has led to volatility in the domestic debt market, with the 10-year benchmark yield swinging close to a tenth of a percentage point. Some investors have raised concerns over the lack of necessary systems in place to facilitate trade in Indian government bonds. JP Morgan recently became the first major global index to include Indian government securities.
Indian government bond yields rose in early trade on Thursday, with the benchmark yield back above the 7.35% mark, as their U.S. peers resumed their upward journey after a brief fall earlier in the week. The 10-year benchmark bond yield was at 7.3605% as of 10:00 a.m. IST, after ending at 7.3408% in the previous session. U.S. yields rose after an auction showed weak demand and following data that indicated new-home sales accelerated in September, affirming market expectations of prolonged higher-for-longer interest rates. Market participants expect the central bank to conduct OMO sales worth 500 billion rupees in the current quarter.
