Government Bond

Stock market crash: Experts are highly bearish on Indian stock market on India's household debt reaching 70% of GDP, and earnings per share nosediving by around 50%

The rebound of the 10-year G-sec yield above 6.6% reflects this reality. Even as the RBI signals accommodation, the large government borrowing programme and persistent supply overhang are limiting any sustained rally.

Fixed income is for stability. In 2025, interest rates on fixed deposits fell, while yields on government bonds increased. The interest rates on corporate bonds saw some moderation but held steady.

The benchmark 10-year yield ended at 6.5398%, after closing at 6.6328% on Tuesday, dropping the most in a single ⁠session since May 13. Bond ⁠yields move inversely to prices.

As long as India’s growth engine stays strong and inflation behaves, foreign investors continue to earn well for holding Indian debt. In short, the Fed isn’t taking away India’s yield advantage anytime soon.

Market participants argue that without a durable infusion of ₹2-2.5 trillion and structural shifts in bank balance sheets, the monetary easing cycle will fail to transmit to the broader economy.

The 10-year benchmark yield stands at around 6.45%–6.55%, while longer maturities in the 13–15 year range offer yields of 6.86%–6.9%. This pickup over the benchmark makes it attractive, particularly as inflation stays contained and the RBI edges closer to a rate-cutting cycle.

Against a backdrop of a longish pause in the rate cycle, investors may choose to invest in short to medium-duration funds, having higher exposure to corporate papers based on their investment objective and risk appetite, advised Avnish Jain of Canara Robeco AMC.