Archive · 6 Sep 2025
Axis MF's Outlook on Indian Debt Markets Amidst Economic Shifts
India's economy is growing, but the bond market is facing some changes.
Interest rates may not go down much more.
Bond yields, especially for longer-term bonds, are rising due to government borrowing and global events.
This means the prices of these bonds might fall.
Axis Mutual Fund suggests a cautious approach: balancing short-term bonds and some government bonds.
They recommend focusing on high-quality bonds and carefully managing when to buy and sell bonds to reduce risk.
Risks include currency changes and government borrowing plans.
Overall, the fund suggests keeping a close watch on the market.
RBI is likely to maintain a neutral repo rate stance with limited further cuts.
Yields on government bonds, especially the longer-term ones, are rising.
Large government borrowing and global events are impacting bond supply and demand.
A 'barbell' strategy with short- to medium-term bonds and some long-duration government securities is suggested.
Overseas flows and currency fluctuations are key factors to watch for debt mutual fund investors.
- Who
- Axis Mutual Fund
- What
- Outlook on Indian debt markets
- When
- Next 12-18 months
- Where
- India
- Why
- To guide investment strategy
- Real GDP Growth (Q1 FY26)
- 7.8%
- 10-year Government Bond Yield (August)
- 6.6%
- Spread between 10-year and 30-year bond yields
- 70 bps
- Repo Rate
- Neutral stance
Sources
Exclusive: FM Sitharaman flags 'unsustainably high' bond yields despite low rates
G-Sec yields could soften on the back of CRR-cuts related liquidity infusion
Close watch on bond yields as Centre monitors borrowing costs - Telegraph India
Sitharaman Slams Opposition Over GST Criticism, Says India Deserves Better Leaders