Indian government bonds advanced early Monday as surging foreign inflows and stable oil prices blunted geopolitical worries re-ignited by a fresh burst of U.S.-Iran strikes over the long weekend. Iran attacked U.S. bases in Kuwait and Bahrain Sunday shortly after President Donald Trump threatened that the Islamic Republic would cease to exist if it ‌did not ⁠honor the ⁠interim agreement. Diplomacy prevailed later in the day, with both sides agreeing to halt hostilities and resume peace talks. Brent crude futures steadied in Asian trade, at $71.90 per barrel. The U.S. 10-year Treasury yields also traded rangebound at 4.3744%.India bonds edge up, supported by steady oil prices, halt to US-Iran strikesIndian government bonds saw an early rise on Monday, buoyed by strong foreign investment and stable oil prices, which helped offset geopolitical tensions. Despite recent U.S.-Iran strikes, a diplomatic resolution and a dip in crude oil prices eased inflation concerns. This positive sentiment, coupled with RBI incentives and tax cuts, has attracted significant foreign inflows into government bonds, boosting market confidence. India's benchmark 10-year yield inched lower to 6.7568% by 11:45 a.m. IST, near Thursday's close of 6.7690%. The 10-year yield has eased 28 basis points over the last five weeks. Buying surged ⁠in the ‌6.68% 2040 note after strong bidding in last Thursday's auction, traders said. It hovered nearly 3 bps lower at 7.0033%. A private-bank trader said ⁠that while the fragile truce has bred caution, stable oil prices and steady foreign inflows continue to support sentiment. "With crude $12 below the RBI's estimate, inflation worries have eased," he added. Lower oil prices have taken out the risk of further increases in retail petrol and diesel prices, analysts at Goldman Sachs said in a note. While previously announced hikes will still filter into inflation, the risk of additional pass-through has "diminished materially." Consequently, the bank raised ‌its CY26 India GDP growth forecast by 30 basis points to 6.8%, while cutting headline inflation and current account deficit forecasts by 20 basis points each, to 4.4% and ⁠1.1% of GDP, respectively. Foreign investors have also ramped up purchases of government bonds after RBI incentives and New Delhi's tax cuts, net buying a record of almost $3 billion so far in June.RATESIndia's overnight index swap rates edged higher in early trading. "The lack of reaction in crude sparked some profit-booking in OIS," a private-bank trader said. The one-year OIS rate was at 5.77%, while the two-year rate stood at 5.9175%. The five-year rate was at 6.19%. All three were up about 1 basis point.