**Market Brief: India Government Bonds & Economy** **Bond Market: Consolidation Amid Supply Pressure** Indian government bonds paused their recent rally on Tuesday, February 17, 2026, trading largely flat as the market absorbed a massive wave of state debt supply. After a bullish streak that saw yields soften by approximately 10 basis points over the last five sessions, the benchmark 10-year bond yield held steady, hovering around **6.67%**. Market participants remained cautious ahead of the results for the state development loan auction, where states aimed to raise an aggregated **₹379 billion ($4.18 billion)**. This marks the fourth consecutive week of state borrowing exceeding ₹375 billion, keeping investor sentiment in check despite favorable global cues. **Global Cues & Economic Indicators** Global tailwinds provided some support, preventing a sell-off. U.S. Treasury yields remained benign, with the 10-year note trading near **4.04%**, following softer-than-expected inflation data that bolstered expectations for Federal Reserve rate cuts. Domestically, the macroeconomic backdrop remains stable. January CPI inflation printed at **2.75%**, comfortably within the Reserve Bank of India’s tolerance band. The central bank has maintained the repo rate at **5.25%**, signaling a neutral stance that continues to anchor short-term expectations. **Currency & Equity Markets** * **Rupee:** The Indian currency showed resilience, trading in a narrow range to close near **90.73** against the U.S. dollar, supported by falling crude oil prices but capped by foreign outflows. * **Equities:** Broader markets extended gains, with the Sensex rising **174 points** to close at **83,450**, and the Nifty 50 settling above **25,725**, driven by strength in banking and FMCG stocks. **Key Takeaways** * **Benchmark Yield:** ~6.67% (Steady) * **State Borrowing:** ₹379 billion target * **US 10-Year Yield:** ~4.04% * **Domestic Inflation:** 2.75% (January) * **Market Sentiment:** Cautious consolidation awaiting auction absorption.