[The Hindu] Escalation of Kashmir Conflict Leads to Consumer Sentiment Dip

As conflict rages between India and Pakistan, Indian bond yields soar to 

new heights

December 7th, 1998


Indian bond yields have been soaring over the past month as we see investors demand greater risk premiums

 and fear over heightened inflation caused by government spending on the military. The conflict has been 

escalating, with more missiles being fired from both sides and on-the-ground combat increasing in frequency

 and mortality rates rising. 

 

As consumers start to lose confidence in the Indian economy and government bonds, fear engulfs the Indian 

peninsula. Investors are more weary of government bonds, and financial contagion from other Asian 

economies is slowly starting to spread, and we might be faced with a new threat of illiquidity in no time. 

 

Location: Delhi, India

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