Overseas investors are buying Indian bonds even as locals remain wary

Overseas investors kept buying Indian debt even during most of a seven-month rout through February

While there’s still skepticism that India’s state-run banks will get back into the nation’s sovereign bond market, overseas investors are keen to buy more of the notes after the central bank granted them greater access.

India’s high yields and relatively stable currency have spurred Mitsubishi UFJ Kokusai Asset Management to buy more rupee securities, said Tatsuya Higuchi, executive chief fund manager of the fixed-income investment division in Tokyo. Standard Chartered Plc is long on the nation’s 10-year paper due to “cheap valuations,” Arup Ghosh, senior Asia rates strategist, wrote in a note Tuesday.

“Inflation seems to be stabilising, while foreign-direct investment flows