India bonds face twin drag from rising oil, US yields

Indian government bonds have weakened for a second day due to rising oil prices and increasing US Treasury yields. This twin drag on the market is causing inflation concerns, as higher oil prices threaten India's import bill and government finances. The impact is also being felt in the currency market, with the rupee slipping for a fifth day against the dollar, further pressuring the bonds. This combination of factors could continue to weigh on Indian government bonds, making them less attractive to investors.

Why it matters

Rising US Treasury yields and crude prices are fueling inflation concerns in India. This could lead to a decrease in investor sentiment and an increase in bond yields.

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