India bonds fall as oil spike, Treasury rout weigh

Indian government bonds declined early Monday, tracking a US Treasury selloff as escalating US-Iran tensions pushed Brent crude up 4 percent to 79 dollars a barrel, stoking inflation concerns in India, the world's third-largest oil importer. The benchmark 6.94 percent 2036 bond yield rose to 6.7340 percent, while the 10-year US Treasury yield climbed 1.6 bps to 4.5834 percent. A Reuters poll expects June inflation at 4.3 percent, breaching the RBI's 4 percent medium-term target for the first time in 16 months; hopes of Bloomberg Global Aggregate Index inclusion and sustained foreign demand (over 1 billion dollars in July) are expected to cushion further selling pressure.