The path for Indian rupee and government bonds this week hinges on the geopolitical fallout from the militant attack in Kashmir, traders said.

A day after the U.N. appealed for restraint following Tuesday's deadly attack in Indian-administered Kashmir, India reported an exchange of fire across the de facto border in the disputed region.

Indian authorities have detained at least 1,500 people in India-administered Kashmir after a militant attack killed 26 people this past week, a top police officer told NPR.