Indian government bonds surged early Friday, with prices rising sharply as oil prices declined to an eight-week low. Hopes for a US-Iran peace deal revived demand for Indian debt ahead of a weekly auction.
A potential US-Iran peace deal and falling oil prices are boosting demand for Indian government bonds and lifting stock markets, indicating a positive shift in investor sentiment due to reduced geopolitical risk and lower import costs.
Indian government bonds rallied early Friday, with prices rising sharply as oil prices declined to an eight-week low. Hopes for a U.S.-Iran peace deal revived demand for Indian debt ahead of a weekly auction.
Brent crude futures eased nearly 2% to $88.66 per barrel in Asian trade, the lowest intraday level since April 7, after U.S. President Donald Trump on Thursday said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz.
India is the world's third-largest oil importer, making its economy and assets highly vulnerable to price swings. The 10-year U.S. Treasury yield also eased over 7 basis points on Thursday and hovered little changed in Asian hours.
Earlier, Indian stock markets surged Friday, with Sensex and Nifty gaining over 1%, driven by hopes of a US-Iran peace deal and easing oil prices. The Nifty Bank index surged over 700 points to a one-month high, also driven by the prospect of a US-Iran peace deal.