10-year bond rallies most in four weeks on Iran deal bets

Mumbai: Indian government bonds surged on Wednesday on optimism that a potential US-Iran peace deal could cool crude oil prices, boost risk sentiment, and ease inflation concerns. The benchmark 6.48% 2035 bond yield ended at 6.9219%, sliding 10 bps in its biggest single-session plunge since April 8. It closed at 7.0184% on Tuesday. Bond yields move inversely to prices.

"In the event of a positive resolution on the war front, we could see a swift rebound toward the 6.80%-6.85% range, driven by the currently light investor positioning and as the market has overpriced fears of rate hikes in 2026," Vikas Garg, head of fixed income at Invesco Mutual Fund, said.