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The yield is expected to inch up further to 7.50% levels as crude oil prices remain high and amid expectations of a rate hike by the central bank next week. The 10-year yield had previously closed at 7.18%, according to CCIL data. Yields last touched 7.50% in October 2022. India's 10-year benchmark bond yields have surged to 7.21%, reaching their highest point in two and a half years. With oil prices continuing to soar and an anticipated rate hike, analysts predict these yields could escalate to 7.50% if the Reserve Bank of India enacts a 25 basis point increase. A substantial bond issuance is on the horizon, adding complexity to the supply-demand landscape. The domestic bond tracked its US counterpart, which at 5.33% is at its highest yield since 2002, according to Reuters. The bond market will remain shut on Friday for Gandhi Jayanti, and the central bank will announce its rate decision next week and is expected to raise interest rates by 25 basis points to 5.50%. "There is a healthy supply of bonds, both central and state, and as per today's price action, it seems like the market is pricing in a 50 bps hike. Yields will likely inch up further if there is a 25 bps hike, and we may see a relief rally if the RBI hikes by 50 bps. Nevertheless, I think we would touch a peak of 7.50% in benchmark yields in this cycle," said Rajeev Pawar, head of treasury, Ujjivan Small Finance Bank. The government sold debt of ₹33,000 crore on Thursday, while state governments are expected to sell bonds worth ₹3.3 lakh crore to ₹3.5 lakh crore next week. This would potentially weaken supply-demand dynamics, with supply outweighing demand, traders said. "Market sentiment will remain bearish until oil prices cool, the MPC is further adding to the volatility. I think yields would retrace from 7.25%, as there could be some buying interest that emerges at that level," said a bond trader at a large public sector bank. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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