Bonds are beating stocks this year
Indian bond yields have fallen as the RBI has cut its policy rate due to lower inflation
The S&P BSE India Government Bond index has given higher returns than the S&P BSE Sensex in 2016 so far, as the chart shows. The indices, taken from the S&P Dow Jones indices, have been rebased to 100 at the start of the year. The chart reflects total returns from both indices. Indian bond yields have fallen as the Reserve Bank has cut its policy rate, due to lower inflation. Bond prices move inversely with yields. With expectations of another rate cut on the anvil, the prospects for bonds continue to be robust.