Bond yields surged to over three-and-a-half-month high as a rise in global crude oil prices heightened concern about domestic inflationary pressure and fiscal slippages. Rupee also hit a six-week low against US dollar.

The 10-year government bond yield ended at 7.475% - a level last seen on 11 January - from its Friday's close of 7.39%. Bond yields and prices move in opposite directions.

The rupee ended at 69.67 a dollar, down 0.45% from its previous close of 69.36. The home currency opened at 69.76 a dollar and touched a low of 69.88.

Oil prices rose to the highest in almost six months as the US government is expected to terminate sanctions waivers that allowed buyers to import Iranian crude. Brent crude prices hovered near a six-month high of $74.31 per barrel.

The minutes of the April monetary policy committee (MPC) meeting, released on Friday, reiterated the need to address growth after the objective of low and durable inflation has been achieved.

The minutes also showed that oil prices and their impact was a key factor that pushed two members to vote against a cut in the policy repo rate. RBI deputy governor Viral Acharya and nominee member Chetan Ghate voted against an RBI rate cut on the basis of their concerns that rising crude oil prices have the ability to push up everything from headline inflation to inflation expectations.

Earlier, the International Monetary Fund, Asian Development Bank and at home, the Reserve Bank of India had all trimmed their growth projections for India for FY19 and FY20. These revisions leave growth in the 7.2-7.5% range.

So far this year, the rupee has gained 0.6%, while foreign investors have bought $7.53 billion in equity and sold $658.40 million in debt market.

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