Indian government bonds decline as US Treasury yields surge to multi-year highs, triggering emerging market outflows and pressuring the rupee. The benchmark 6.48 percent 2035 bond yield rose to 7.1205 percent as the 30-year US Treasury hit a 19-year high and the 10-year yield reached 4.6690 percent. The yield premium on Indian bonds narrowed to 244 basis points, its lowest in two months. The Nifty 50 fell 0.41 percent to 23,521, while the rupee hit another record low of 96.96 per dollar. Traders warn India faces a steep balance of payments deficit this fiscal year, with projections tracking over 70 billion dollars in deficit for FY27 due to widening current account deficit and weak capital inflows. Higher global yields and geopolitical uncertainty surrounding the Iran conflict have triggered capital outflows from emerging markets, weighing on Indian assets and currency performance.
