New Delhi, June 15 -- Indian government bonds gained and the 10-year benchmark yield dropped to a 12-week low on Monday, following a rally in global bond markets, as crude oil prices slumped after the US-Iran peace deal.

The yield on the benchmark 6.94% 2036 note dropped 3.2 basis points to 6.8637%, its lowest intraday level since March 25. The yield is now 20 bps above pre-war levels.

Meanwhile, the US 10-year yield also fell nearly 6 bps to 4.42%.

The Indian rupee was also trading near a five-week high at 94.5750 per dollar.

The US and Iran officials announced a preliminary deal to end the war in the Middle East and reopen the Strait of Hormuz. The agreement led to a sharp fall in crude oil prices, which had surged as high as $120 a...