Oil spike jolts Indian bonds, 10-year yield hits three-week high

Indian government bonds sold off sharply with the benchmark 10-year yield climbing 6.4 basis points to 6.7945%, a three-week high, as a 9.6% overnight surge in Brent crude (to $87.18) driven by US-Iran tensions rattled investor sentiment. The rupee weakened 0.61% to 96.20 per dollar and Mumbai shares fell 0.6%, while June retail inflation came in at 4.38%, slightly above expectations. Foreign investors have poured nearly $6.5 billion into Indian government bonds since June ahead of Bloomberg Index Services' decision on Indian bond inclusion.