By Khushi Malhotra
Indian government bonds took a hit on Thursday as tight banking system liquidity and the prospect of a trade deal between the U.S. and India sparked selling.
The benchmark 10-year bond yield closed at 6.5357%, up from 6.5040% on Monday. The market was closed for the last two days due to holidays. Bond yields rise when prices fall.
Market sentiment was bearish, with traders paring positions amid hopes for a U.S.-India trade deal. A reduction in steep U.S. tariffs from such a deal could influence the central bank’s rate easing cycle, potentially limiting future rate cuts, traders said.
A Reuters report on Thursday indicated that Indian refiners are likely to slash imports of Russian oil to comply with new U.S. sanctions. This move could remove a major obstacle to a trade agreement with the United States.
Currently, India faces 50% tariffs on its exports to the U.S., with half of these duties imposed in retaliation…
