World oil prices fell more than five percent on Monday on fears that China’s worsening Covid outbreak could dent demand from the major energy consumer.
Europe’s benchmark contract Brent North Sea crude fell to $101.20 a barrel and US WTI oil fell to $96.85.
Traders rushed to cover short positions amid plunging oil prices and US Treasury yields as Indian government bonds edged higher in 19 months.
The yield on the benchmark 10-year bond fell 10 basis points to 7.06%, the biggest drop since September 2020. The second-highest traded 6.67% 2035 bond yield dropped seven basis points. According to ICICI Securities Primary Dealership Ltd, Monday’s rally helped traders cover their short positions.
“Bonds rose due to lower crude oil and US Treasury yields,” said Gopal Tripathi, head of treasury at Jana Small Finance Bank. bond prices.
The benchmark yield hit a three-year high of 7.28% in April, the highest since May 2019, and declined five basis points last week.
Shailendra Jhingan, Chief Executive, ICICI Securities Primary Dealership Ltd said, “I think it is the traders to stop loss as the market was lower and is headed for a sharp rally due to risk-off positions.”