Indian Bonds Post Biggest Weekly Drop This Month on Inflation

India’s 10-year sovereign bonds posted their biggest weekly drop this month on speculation rising inflation will prevent further interest-rate cuts.

Consumer prices climbed 5.4 percent in June from a year earlier, the fastest pace in nine months, official data showed this week. Price pressures could worsen as deficient monsoon rains threaten to hurt farm output and stoke food costs, which account for about half of the inflation basket. The government sold 150 billion rupees ($2.4 billion) of notes as planned at a weekly auction Friday.