sales. Higher oil tends to feed inflation expectations, which can keep interest rates elevated. At the same time, US Treasuries sold off and the 10-year yield hit 4.5650%, often pulling other countries’ borrowing costs up as investors compare returns across markets.
Still, the broader setup hasn’t fully turned: Reuters noted the 10-year Indian yield has finished higher only twice in the last eleven sessions. One reason is steady foreign buying: investors have net bought 362 billion rupees ($3.81 billion) of Indian government securities since the start of June via the Fully Accessible Route (FAR), a channel that lets overseas institutions buy certain Indian bonds without usual limits, alongside rising hopes of inclusion in Bloomberg’s Global Aggregate Index.
Why should I care?
For markets: Those 362 billion rupees of FAR inflows can change how the 6.94% 2036 bond trades.
If more money is coming in because of FAR access and potential Bloomberg Global Aggregate Index inclusion, some of it behaves like “benchmarking” flow: allocations driven by index rules and a desire to avoid drifting too far from a benchmark, rather than by daily macro headlines. That demand can be relatively price-insensitive, so it can lean against local selloffs when global shocks – like higher oil and a rising US 10-year yield – push Indian yields up. In practice, the 6.94% 2036 bond can still move with the US 10-year, but any drawdowns on risk-off days may be smaller and shorter-lived than they’d be without those foreign flows.