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Indian government bond yields fell in early trading on Monday. Photo: Shutterstock
Indian government bond yields fell in early trading Monday after the central bank reduced its debt sales and announced a second debt buyback in two weeks.
The benchmark 10-year bond yield was at 6.7735 percent at 10:00 IST, compared to its previous close of 6.7914 percent.
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“Multiple domestic factors are contributing, and we could see the benchmark bond yield stabilize around the 6.75 percent mark for the day, with the focus then shifting to inflation data,” said a dealer of a main concession.
The Reserve Bank of India net sold bonds worth just Rs 20 crore ($2.38 million) in the week ended October 4, after not selling any debt in the week ended October 4. September 27.
Prior to this, the RBI had sold bonds from its portfolio for 11 consecutive weeks, posting its longest such streak since January 2022. The central bank sold bonds worth over Rs 24,000 crore in the last 11 weeks leading up to September 20.
New Delhi will buy back bonds worth Rs 25,000 crore on Thursday, after a similar auction last week, in which it bought back papers worth around Rs 24,000 crore.
India will release its retail inflation data for September after market hours. A Reuters poll puts the figure at 5.04 percent, up from 3.65 percent in August.
Sentiment was also supported by India’s inclusion in the FTSE Russell Emerging Markets Debt Index and the RBI’s change in policy stance to neutral last week.
The yield on benchmark bonds could fall to 6.30 percent by the end of March, due to strong foreign capital inflows and central bank rate cuts, said Jean Charles Sambor, head of markets debt. emerging companies at TT International Asset Management.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: October 14, 2024 | 10:43 a.m. STI