10-Year Bond Yield Falls On Report Of India's Addition To Bond Index

India's 10-year bond yield declined after six sessions on a report of JPMorgan consulting investors about adding India to its bond index.

Yield on the 10-year bond fell 9bps to 7.2% during the session. The 10-year bond yield closed 8 bps lower at 7.22%, according to Bloomberg data.

• JPMorgan is consulting with investors about whether to make a large portion of India's bond market eligible for GBI-EM Global Diversified index of local currency debt, Financial Times reported citing two people familiar with the matter.

• The consultations are expected to be completed by next month and as announcement of official proposal anticipated in October, the report said.

• JPMorgan and India's finance ministry declined to comment on FT's queries.

• The ministry didn't immediately respond to BQ Prime's emailed queries.

• The GBI-EM (JPMorgan Government Bond Index-Emerging Markets) tracks emerging market debt benchmarks that track local currency bonds.

• Goldman Sachs, in a recent note, had expected the inclusion to happen in 2013, bring in nearly $30 billion of inflows.

• Bloomberg, quoting Nagaraj Kulkari, senior Asia rates strategist at Standard Chartered Bank Singapore, reported that India's inclusion into GBI-EM Global Diversified Index remained a "close call".

• If the bonds were made euroclearable, then the likelihood of inclusion would have higher, according to Kulkarni.