(Bloomberg) -- Indian bonds tumbled as JPMorgan Chase & Co. refrained from adding local government bonds to its emerging markets debt index. 

The yield on benchmark 10-year bonds surged as much as 12 basis points to 7.48%, the highest since June. The rupee also edged lower. Higher US Treasury yields and oil prices also contributed to the move. 

The announcement comes as a disappointment for traders, who were expecting index inclusion in this review amid expectations the move would lure billions of dollars of inflows. JPMorgan follows FTSE Russell in holding off on adding Indian bonds to its emerging market gauge, citing investment hurdles that still need to be resolved.

“The lion’s share of today’s move is due to the index news,” said Vijay Sharma, senior executive vice president at PNB Gilts Ltd. The 7.50% level could become the new pivot for the market, with some investors finding value at that level, he said. 

READ: JPMorgan Holds Off on Adding India to Bond Index, Keeps on Watch

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