10-year bonds fell for a fourth day, pushing yields to a nine-month high, on concern a global commodities rally will stoke inflation.

Crude touched a 10-month high of $74.72 on August 21. A rebound in prices will add pressure on the central bank to raise borrowing costs from record lows, said Krishnamurthy Harihar, treasurer in Mumbai at the Indian unit of FirstRand Ltd, South Africa?s second-largest financial services company. ?Bonds don?t look too good as commodities are rising fast and the Indian consumer-price index is already quite strong,? said Harihar. ?The wholesale-price index too should start rising soon.? Government bonds showed a mixed trend due to uneven demand and supply transactions. The 6.90% bond maturing 2019 dropped further to Rs 96.95 from Rs 97.17 previously while its yield firmed up to 7.34% from 7.31%.

India sold Rs 5,000 crore of the notes at a yield of 7.30%, compared to 7.25% forecast. Primary dealers bought Rs 321 crore of the unsold 10-year bonds. It also sold securities maturing in 2015 and 2027 at higher-than-expected yields. The cost of five-year interest-rate swaps increased. The rate, a fixed payment made to receive floating rates, rose to 6.49% from 6.41% on Aug 21.