Indian government bonds rose in early deals on Wednesday as ​oil prices slid, but the benchmarks were unable to break past ‌key yield levels as caution over further rallying prompted ​profit booking, with focus shifting to the ⁠U.S. central bank policy.

The yield on the benchmark 6.94% 2036 note was at 6.8563% as of 10:30 a.m. IST, after closing at ‌6.8651% on Tuesday. Yields move inversely to bond prices.

"There is no sufficient conviction for yields to ‌drop further sharply, and hence profit taking at ‌current ⁠levels is keeping bonds range-bound," trader with a private ⁠bank said.

Bonds rallied after the benchmark Brent crude contract fell 5% for a second consecutive session on Tuesday, as details of the interim peace ​dealbegan to emerge.

The U.S. ‌will allow Iran to sell oil, and the deal would also extend a ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, ‌which Iran had effectively blocked since the war began ​on February 28.

The contract has wiped out the bulk of its gains seen after the war ⁠and is now just around 10% higher than pre-war levels.

India imports about 90% of its crude oil requirements, and ‌a sustained fall in prices could ease pressure on inflation, the rupee, and the country's trade deficit, supporting the central bank's efforts to attract foreign inflows.

Foreign investors have bought domestic bonds worth more than $2 billion over the last eight sessions since the Reserve Bank of India announced measures ‌on June 5.

Meanwhile, the Federal Reserve is due to announce ​its first policy decision under the new chair, Kevin Warsh, after Indian market hours. A rate action ⁠is unlikely, but traders will eye commentary to get a sense ⁠of rate hikes in 2026.

RATES

India's overnight index swap rates added to their declines, as swaps are more ‌reactive to oil prices.

The one-year swap rate was at 5.86%, and the two-year rate was at 6.04%.

The ​five-year rate was at 6.30%.

Published on June 17, 2026