FIIs pulled out ₹1.02 lakh crore from Indian equities since July, including ₹7,800 crore in September
New Delhi
Indian government bond yields are likely to dip by around 10 basis points by November, supported by stable inflation and steady oil prices, according to a report from Crisil Intelligence released on Wednesday.
The 10-year benchmark yield, which stood at 6.59 percent on August 31, is expected to fall within the 6.42–6.52 percent range by September-end and ease further to 6.38–6.48 percent by November. Similarly, state development loan yields may soften from 7.23 percent to 7.15–7.25 percent, while 10-year corporate bond yields are projected to decline from 7.19 percent to 7.08–7.18 percent.
Crisil noted that benign oil prices are offsetting global risks, including geopolitical tensions and slowing global growth. Key influences on yields include the upcoming U.S. Federal Reserve decision, domestic liquidity averaging Rs 2.84 lakh crore in August, U.S.-India trade talks, and fluctuating foreign investment trends.
Foreign Institutional Investors (FIIs) have withdrawn heavily from Indian equities, selling Rs 1.02 lakh crore between July 1 and September 8, including Rs 7,800 crore in early September alone. Despite these outflows, bond yields are expected to stay stable due to supportive domestic conditions.
The Reserve Bank of India’s Monetary Policy Committee is unlikely to cut repo rates in October, maintaining its data-driven pause. Meanwhile, GST rationalisation is expected to free about Rs 50,000 crore for the economy, boosting consumption and offsetting fiscal strain.