Indian government bonds rose Monday as Brent crude fell, with Reuters linking the oil decline to hopes for progress in U.S.-Iran talks, while yield readings for the benchmark 10-year bond diverged.
The Clearing Corporation of India (CCIL) listed an indicative yield of 7.3499% for the 6.94% GS 2036 on Nov. 2, down from 7.3977% on Oct. 30. That is a decline of 4.78 basis points. CCIL labels the figures indicative.
Reuters reported a closing yield of 7.3154% for the same bond, nearly 10 basis points lower on the day. The news agency described the move as the yield’s sharpest one-day drop since early April. Reuters’ closing figure was 3.45 basis points below CCIL’s Nov. 2 reading.
Brent crude futures fell 4.2% to $108.66 a barrel at 12:50 p.m. GMT, Reuters reported. The Associated Press (AP) reported a 4.2% decline to $108.68. AP, citing a regional official briefed on the talks, said an Iranian delegation left Qatar on Sunday, a draft proposal had circulated and a follow-up meeting was under discussion.
Reuters said cheaper oil could ease pressure on India’s inflation, external accounts and public finances, and reduce expectations of sharp monetary tightening. Gaura Sengupta, chief economist at IDFC First Bank, told Reuters that crude prices and U.S. Treasury yields both affect the outlook for Indian government bonds.
Other Indian assets also advanced, Reuters reported. The Nifty 50 gained 1.68% to 23,440.80, while the rupee strengthened 0.05% to 94.90 per U.S. dollar.
The U.S. midterm elections are scheduled for Tuesday, Nov. 3. Reuters identified the vote as a possible factor for ceasefire expectations and oil markets.
