India's government bonds faced a significant decline on Monday following the collapse of U.S.-Iran peace talks over the weekend, which heightened concerns over rising oil prices. The yield on the benchmark 6.48% 2035 bond increased by 6 basis points to 6.9697% as of 11:00 a.m. IST, up from 6.9119% on Friday. The Indian rupee weakened by 0.7% to 93.38 per dollar, while the benchmark Nifty 50 index fell nearly 2%. The market reaction reflects fears that elevated crude prices could adversely affect India's inflation and growth outlook. On Friday, traders had anticipated a peace deal, leading to a bond purchase of ₹62.26 billion (approximately $667 million) by mutual funds and foreign lenders. Brent crude oil prices surged by 7.2% to $102 per barrel following U.S. President Donald Trump's announcement to block ships from Iranian ports. Additionally, India's banking system liquidity remained high at 5.54 trillion rupees, despite the Reserve Bank of India's recent cash-drain operation. Market participants are also awaiting India's March inflation data, scheduled for release at 4:00 p.m. IST, to gauge future market direction.