Oil slip for bond market: Foreigners dump Indian paper at record pace

Indian sovereign bonds declined in May for the ninth month out of 10 as overseas investors dumped $2.6 billion of rupee-denominated bonds

Foreign investors are dumping Indian bonds at a record pace as surging oil prices threaten to worsen the nation’s finances, stoke inflation and hurt economic growth.

Overseas funds have pulled $4.5 billion from the local debt market since the start of the year, the most in any year-to-date period in data going back to 1999. Second-quarter outflow was the biggest among the major Asian nations as Brent crude rose above $80 a barrel, the highest since 2014.

Every $10 per barrel increase in oil prices will worsen India’s current-account balance by 0.4 per cent of gross domestic product and raise inflation by