Govt bonds swing on talk of joining indices

India's government debt market is on tenterhooks again as traders assess the buzz around prospects for the nation's sovereign debt to be added to global indexes.

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Bonds swung between gains and losses last week with traders latching on to every bit of news-be it a report that the Reserve Bank of India is asking some foreign lenders on how to handle increased inflows or the central bank changing debt investment rules for banks in line with global norms.

Traders are betting that the overseas fur 'need for diversification will trump a lack of tax concessions from the authorities amid renewed speculation that JPMorgan Chase & Co. will likely add India's sovereign bonds to its emerging market index.