Mumbai: Yield on Government of India Bonds Shares were slightly higher on Friday after softening in two straight sessions, as market participants awaited a fresh supply of debt through weekly auctions.
The central government aims to raise at least 280 billion rupees ($3.45 billion) through bond sales, including 120 billion rupees of benchmark paper.
The benchmark 10-year yield was up 7.3337% as of 10:00 AM IST, after ending at 7.3137% on Thursday.
A trader with a primary dealership said positivity dominated the policy pivot in the next fiscal due to supply concerns, and hence the benchmark yield may not stay below the 7.30% level.
bond yields Markets ended lower on Thursday, tracking a slide in US yields after weak economic data raised bets that the Federal Reserve would have to begin a rate-cutting cycle in the final quarter of 2023.
In response, India’s five-year overnight indexed swap rate crashed to its lowest level in the current financial year on bets that a sharp policy pivot from the Fed could signal a dovish turn by the Reserve Bank of India.
The 10-year US yield which had hit 3.32% on Thursday was trading at a four-month low of 3.42%.
The rise in oil prices also weighed on the sentiment. Benchmark Brent crude futures rose 0.6% to $86.65 a barrel, after rising 1.4% on Thursday.
Traders said the federal budget, to be presented on February 1, would focus on the government’s fiscal consolidation path and the borrowing calendar for the next fiscal.
Most market participants estimate gross borrowings to exceed Rs 15.50 trillion in the next financial year.
IDFC First Bank expects demand from banks, insurance companies and provident funds to continue in the next financial year, which will help in supply absorption, while liquidity crunch could also lead to central bank debt purchases.
The central government aims to raise at least 280 billion rupees ($3.45 billion) through bond sales, including 120 billion rupees of benchmark paper.
The benchmark 10-year yield was up 7.3337% as of 10:00 AM IST, after ending at 7.3137% on Thursday.
A trader with a primary dealership said positivity dominated the policy pivot in the next fiscal due to supply concerns, and hence the benchmark yield may not stay below the 7.30% level.
bond yields Markets ended lower on Thursday, tracking a slide in US yields after weak economic data raised bets that the Federal Reserve would have to begin a rate-cutting cycle in the final quarter of 2023.
In response, India’s five-year overnight indexed swap rate crashed to its lowest level in the current financial year on bets that a sharp policy pivot from the Fed could signal a dovish turn by the Reserve Bank of India.
The 10-year US yield which had hit 3.32% on Thursday was trading at a four-month low of 3.42%.
The rise in oil prices also weighed on the sentiment. Benchmark Brent crude futures rose 0.6% to $86.65 a barrel, after rising 1.4% on Thursday.
Traders said the federal budget, to be presented on February 1, would focus on the government’s fiscal consolidation path and the borrowing calendar for the next fiscal.
Most market participants estimate gross borrowings to exceed Rs 15.50 trillion in the next financial year.
IDFC First Bank expects demand from banks, insurance companies and provident funds to continue in the next financial year, which will help in supply absorption, while liquidity crunch could also lead to central bank debt purchases.