New Delhi, April 2 -- Indian government bonds declined on Thursday - the first trading session of FY27 - with the benchmark yield rising for the twelfth consecutive session, driven by a sharp uptick in crude oil prices and caution ahead of a scheduled debt auction.

The benchmark 6.48% 2035 bond yield rose about 4 bps to 7.0734%, its highest level since May 21, 2024. It ended at 7.0345% in the previous session. Notably, benchmark yields have increased by 37 bps in March and 45 bps in FY26, despite 100 bps of rate cuts by the Reserve Bank of India (RBI).

Investor sentiment weakened after US President Donald Trump signalled continued military action against Iran over the next two to three weeks, dampening hopes of a near-term resolution to...