Indian bonds drop by most since 2017

MUMBAI: Benchmark sovereign bonds in India tumbled by the most in more than three years after Prime Minister Narendra Modi’s government increased borrowing by more than half to cover revenue lost due to the virus-induced slowdown.

The yield on 10-year bonds climbed 22 basis points, the biggest increase since February 2017, to 6.19%. The administration late Friday said it will borrow 12 trillion rupees (US$159bil) for the fiscal year started April 1, up from the budgeted 7.8 trillion rupees. The nation’s stocks climbed as the ramped-up borrowing plan stoked bets of the government announcing a bigger fiscal stimulus to the support the economy.