India bonds extend recovery tracking rise in U.S. Treasuries

India's benchmark 10-year bond yield fell 3 basis points to 6.7436%, extending a two-day decline, tracking overnight gains in U.S. Treasuries after softer U.S. PPI data pared Fed rate-hike bets. State-run lenders bought 156 billion rupees of bonds over the last three sessions, while foreign investors purchased over $4.2 billion in Fully Accessible Route bonds since June 1 on expectations of India's inclusion in the Bloomberg Global Aggregate Index. Nomura forecasts July inflation at 4.0% year-on-year, down from 4.4% in June, and expects an extended RBI hold.