Bond yields ease on hopes of good demand
Friday, 30 April 2010
MUMBAI, Apr 29 (Reuters): Federal bond yields eased Thursday on expectations of a good demand for bonds at Friday's 120 billion rupees bond sale.
Traders said they expected the coupon on the new 10-year bond to be set at around 7.85 per cent levels.
At 2:34 pm, the yield on the most traded 7.02 per cent, 2016 bond was at 7.53 per cent, from its previous closing of 7.57 per cent while the benchmark 10-year bond yield was down one basis point at 8.08 per cent.
Dealers said the trading activity in the current benchmark bond would diminish once the new 10-year bond is sold.
The government will sell 50 billion rupees each of 7.38 per cent bonds maturing in 2015 and a new 10-year bond Friday, along with 20 billion rupees of 8.28 per cent bonds maturing in 2032.
India's annual food price inflation eased in mid-April, but fuel price inflation quickened maintaining an upside pressure on the wholesale price index that could prompt further monetary tightening by the central bank.
Dealers said the market was looking for any direction in headline numbers. Wholesale price inflation in March touched a 17-month high of 9.9 per cent.
In interest-rate futures on the National Stock Exchange, the June contract implied a yield of 8.2735 per cent.
Traders said they expected the coupon on the new 10-year bond to be set at around 7.85 per cent levels.
At 2:34 pm, the yield on the most traded 7.02 per cent, 2016 bond was at 7.53 per cent, from its previous closing of 7.57 per cent while the benchmark 10-year bond yield was down one basis point at 8.08 per cent.
Dealers said the trading activity in the current benchmark bond would diminish once the new 10-year bond is sold.
The government will sell 50 billion rupees each of 7.38 per cent bonds maturing in 2015 and a new 10-year bond Friday, along with 20 billion rupees of 8.28 per cent bonds maturing in 2032.
India's annual food price inflation eased in mid-April, but fuel price inflation quickened maintaining an upside pressure on the wholesale price index that could prompt further monetary tightening by the central bank.
Dealers said the market was looking for any direction in headline numbers. Wholesale price inflation in March touched a 17-month high of 9.9 per cent.
In interest-rate futures on the National Stock Exchange, the June contract implied a yield of 8.2735 per cent.