Heavy Supply Weighs on India’s Bond Market as Liquidity Tightens

India’s bond market softened as heavy debt supply and reduced liquidity pushed yields higher, prompting traders to reassess demand expectations ahead of upcoming auctions and policy signals.

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Heavy Supply Weighs on India’s Bond Market as Liquidity Tightens

Heavy Supply Weighs on India’s Bond Market as Liquidity Tightens
India’s bond market saw fresh pressure as higher-than-expected debt supply led to a decline in prices amid tightening liquidity conditions. Traders noted that cash availability in the banking system weakened sharply, pushing short-term borrowing costs higher. Government securities faced selling interest as participants reassessed yield expectations ahead of upcoming auctions. Analysts pointed out that elevated supply, combined with muted demand from key institutional buyers, contributed to cautious sentiment. 
Market participants now await policy cues and liquidity measures that could help stabilize yield movements in the coming weeks.