Bond Bulls Charge In—India’s Debt Market Rebounds After Two-Day Slide!

Image Source: Business Standard

India’s government bond market saw a strong rebound on June 10, with traders stepping in after a twosession decline. The benchmark 10year bond yield climbed to 6.686%, up from 6.2837%, marking its highest level since May 13. Investors are building fresh positions, anticipating stability and mild value buying in the coming days.

Key Highlights:

Market Recovery: Bond yields had jumped on Friday and Monday, following the Reserve Bank of India’s shift to a neutral policy stance, which limited expectations for further rate cuts.
Liquidity Boost: The RBI slashed lenders’ cash reserve ratio (CRR) by 100 basis points, adding to the liquidity surplus and supporting bond market stability.
Investor Sentiment: Traders are betting on consolidation, with primary dealers noting that the 6.30% level is seen as a decent entry point for fresh investments.
Global Influence: While US Treasury yields remain volatile, India’s bond market is showing resilience, with bullish sentiment returning.
Rate Cut Speculation: Some analysts expect one more RBI rate cut in 2025, while others believe the rate cycle has ended, keeping bond yields in focus.