Tuesday saw Indian government bonds holding firm amidst a backdrop of market anticipation surrounding a possible U.S.-Iran peace negotiation. The easing of crude oil prices lent a glimmer of hope to traders. The 6.94% 2036 benchmark note yield settled at 6.8651%, as overnight index swap rates dipped alongside the oil downturn, compounded by advance tax withdrawals influencing market liquidity.

India's 10-year bond yield dropped to its lowest since March 25, driven by falling crude oil prices and optimism over a US-Iran peace agreement boosting foreign inflows.

Indian government bonds saw a significant rally on Monday. The benchmark yield reached a two-month low. This surge followed news of a preliminary peace deal between the U.S. and…

India's bond yields are expected to remain stable as markets await details on the US-Iran peace deal and state debt supply.