Bond yields climbed 30bps to 6.85% on Tuesday, the highest level since March 2025, according to RBI’s latest data.
The NIFTY 50 slid 0.9% to ₹19,800, its biggest one‑day fall in the first quarter, compared with a 0.5% dip in the previous quarter.
Indian government bonds outperformed global peers, remaining at 6.80% thanks to a ₹1.2 trillion liquidity surplus in the banking system that has kept demand for G‑Securities strong, according to a BSE filing.
Analysts caution that if the RBI maintains the repo rate at 6.5%, bond yields may stay elevated, tightening equity valuations. The next RBI meeting on June 15 could signal further tightening, adding to market uncertainty.