NEW DELHI - Indian government bonds fell on Tuesday, with the ​benchmark 10-year note ⁠set for a sixth straight day of losses after Washington ‌and Tehran launched fresh attacks in the Gulf, pushing oil prices higher and clouding India's ​macro outlook.

The U.S. and Iran renewed attacks on Monday as they battled for ​control of ​the key waterway with duelling maritime blockades, derailing a fragile truce.

Oil climbed 6% to $114 a barrel on Monday before easing ⁠more than 1% in Asian trading, while the 10-year U.S. Treasury yield rose nearly 7 basis points after the attacks.

Higher Treasury yields sap demand for riskier emerging-market debt, while pricier oil threatens to swell India's import bill ​as the ‌country meets ⁠about 90% of ⁠its crude needs through imports.

India's benchmark 6.48% 2035 bond yield was up 2 bps ​at 7.0451% as of 10:45 a.m. IST. ‌Bond yields move inversely to prices.

"If the war ⁠drags on, the 10-year yield could climb to 7.25%," a private bank trader said, adding that bonds maturing in 15 years or more are a better refuge during war jitters.

Sentiment on India has turned more bearish, with UBS lowering its FY27 growth forecast by 50 bps to 6.2%.

Separately, New Delhi plans to sell a new 10-year bond worth 340 billion rupees ($3.58 billion) this week, which could ‌add pressure on the current benchmark as the issuance ⁠approaches.

RATES

India's OIS rates rose further, but gains ​were limited as traders had already added sizable paying positions in recent sessions.

The one-year OIS rate was up 3.75 bps at 6.085%, while the two-year swap ​rate was steady ‌at 6.3%. The five-year rate rose 4.75 bps to ⁠6.72%.

($1 = 95.0875 Indian rupees)