MUMBAI: It's not just foreign institutional investors ( FIIs) that have adopted a negative view on Indian sovereign paper, even some domestic banks appear to be seeking higher rates in the short-term amid turmoil in the global bond markets. Private sector lenders including ICICI Bank, HDFC Bank and Axis Bank have reportedly sold government bonds worth thousands of crores of rupees in the past few weeks, four people familiar with the matter told ET. Banks mostly bought the benchmark bonds in early January when the yield was hovering at 7.85-7.90%, a few days before the Reserve Bank of India cut the benchmark rate on January 15. They were expecting yields to fall but these have risen 17 basis points in the past month to end at 7.95% on Friday, pushing prices down, said the people cited above. One basis point is 0.01 percentage point. Emails sent to the banks remained unanswered at press time. "Market sentiment has taken a beating," said Badrish Kulhalli, fund manager, fixed income, HDFC Life Insurance. "The correction has been triggered by global factors...The Indian bond markets are not entirely immune from developments in global bonds and in crude oil prices. This along with some domestic selling pressure has triggered a correction," added Kulhalli. The 117 basis point drop in yields on the benchmark bond between May 15 last year and February 3 this year to a low of 7.64% has led to capital gains, which these banks have decided to lock in. India's largest private sector lender ICICI Bank reported a 12% gain in treasury profit (before tax) to Rs 1,942 crore in the fourth quarter. Axis Bank's treasury profit rose 35% in the same period. HDFC Bank's treasury profit more than doubled to Rs 288 crore from Rs 126 crore earlier. On April 29, the share of private banks selling government securities was higher than usual as they sold a net 8.3% of the daily volume while state-owed banks net bought 11.50%, according clearing house sources. On the next day, private banks sold a net 7% against 14% net purchases by state-owned lenders. Between April 27 and May 6, the share of government securities sold by private sector banks stood at about 18% against purchases at 14.16%. For state-owned banks, sales amounted to 17.12%, 5% lower than purchases, according to Clearing Corporation of India data. But some see this as a temporary phenomenon. "We do not envisage any structural change in bond markets," said Soumyajit Niyogi, interest rate strategist, SBI DFHI Primary Dealership. "A stability in global rate markets, even at the current elevated level, will restore optimism in the domestic bond market.