India, Sept. 13 -- The GST rate rationalisation is cheered by the debt markets. Bond yields which were on an unrestrained upward march for most of the last month, took a sharp dip after GST rate cuts last week.

Long term government bonds were the primary beneficiaries with yields on the 15 years+ maturity Indian government bonds (IGBs) easing 15 basis points over the three trading sessions following the announcement.

This seems paradoxical given long term government bonds are highly sensitive to government's fiscal position and the GST rate cuts are widely expected to put pressure on government finances.

So, what led to the rally in the bond market? How would GST rate rationalisation affect the fixed income markets going ahead?

Perhap...