Indian bond yields slide on rain relief, continued foreign demand

Indian government bond yields declined as the benchmark 10-year yield closed below its 200-day moving average for the first time since October 2025, with traders eyeing a drop to 6.64%. The rally was driven by easing monsoon concerns, with the cumulative rainfall deficit narrowing to 24% from 43.1% earlier, and sustained foreign demand, with overseas investors net buying over Rs 346 billion ($3.63 billion) of Indian government bonds in the five weeks since June 1. Overnight index swap rates also eased across tenors, while US Treasury yields dropped 2 bps to 4.4613%, reducing pressure on emerging market debt.