2023-12-29 04:34:55
Indian government bond yields trended lower as traders bid farewell to 2023 with some buying following a recent rise in yields made entry points attractive, while buying triggered by the valuation at the end of the quarter also contributed to the improvement in sentiment.
The yield on the benchmark 10-year bond was at 7.1852% at 10:00 IST on Friday, following closing at 7.2111% in the previous session. The benchmark yield rose four basis points over the past five sessions and ended at 7.2162% at the end of September.
“It is a well-known factor that yields are expected to decline in the next quarter and since the settlement of today’s transaction will take place on Monday, traders who were on the sidelines for the last few days have become active,” said a trader at a state bank.
On Thursday, Archyde.com reported, citing senior treasury officials at state banks, that they were likely to
resume the purchase of bonds from January following two months of sales.
The government bond yield curve is expected to steepen in 2024 as expected interest rate cuts from the U.S. Federal Reserve and the Reserve Bank of India materialize, several analysts told Archyde.com.
The yield on US 10-year bonds remained below the critical threshold of 3.85%, with investors anticipating a rate cut from the Federal Reserve as early as March.
Domestic attention remained focused on the weekly debt auction later in the day, as well as the borrowing schedule of Indian states for the final quarter of the fiscal year.
New Delhi wants to raise 330 billion rupees ($3.97 billion) through bond sales later today. The auction includes Rs 160 billion worth of benchmark paper, which will bring the outstanding issue closer to the upper limit, which might impact demand.
Traders expect a state borrowing schedule of around Rs 3.50 trillion, leaning towards the heavier side, following states borrowed more than expected in October-December, which was the first case in 13 quarters. ($1 = 83.1460 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)
1703834926
#INDIAN #BONDS #Bond #Yields #Final #Trading #Day #Levels #Turning #Attractive #December
