India's 10-year bond posts biggest daily gain in four months
India's 10-year bond posts biggest daily gain in four months
MUMBAI, Aug 13 (Reuters) - India's benchmark 10-year bond saw its biggest single-day gain in four months on Wednesday on hopes the government would sell less debt after receiving surplus profit from the central bank earlier this week, while a drop in crude prices also aided.
The Reserve Bank of India had announced last week it would slash the size of this week's auction to 80 billion rupees ($1.31 billion) from 140 billion rupees, leading to hopes that future auctions would also be cut or possibly cancelled. India's central bank said on Sunday its board had approved the transfer of a surplus profit of 526.79 billion rupees to the government for the year ended June 2014, which traders said may reduce the need for proceeds from debt auctions in the near future. Expectations of lower borrowing helped offset initial falls in bonds at the start of the session after data on Tuesday showed consumer price inflation accelerating to a two-month high.
Brent crude oil fell for a fourth straight day on Wednesday to its lowest in more than a year, dropping below $103 a barrel as strong supplies overshadowed fears of disruptions from violence in OPEC member Iraq. "There is likelihood that auction postponements may happen as the government has enough cash balance for now and their expenditure will be bunched up at the end of the month," said Arvind Chari, head of fixed income and alternatives at Quantum Advisors.
The benchmark 10-year bond yield closed at 8.76 percent, its lowest level since Aug. 5 and down 9 bps on the day, its biggest single-day fall since April 17.
The new 10-year bond yield dropped 8 basis points on the day to end at 8.54 percent.
The rally in bond markets comes after prices tumbled earlier this month on falling hopes for interest rate cuts this year after the Reserve Bank of India reiterated its commitment to bring down consumer inflation to 6 percent by January 2016.
Sentiment is, however, expected to remain cautious amid the violence in Iraq and Ukraine, holding the market in a range.
The 10-year benchmark bond yield touched a three-month high of 8.89 percent in intraday trade on Friday.
Reuters
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.
MUMBAI, Aug 13 (Reuters) - India's benchmark 10-year bond saw its biggest single-day gain in four months on Wednesday on hopes the government would sell less debt after receiving surplus profit from the central bank earlier this week, while a drop in crude prices also aided.
The Reserve Bank of India had announced last week it would slash the size of this week's auction to 80 billion rupees ($1.31 billion) from 140 billion rupees, leading to hopes that future auctions would also be cut or possibly cancelled. India's central bank said on Sunday its board had approved the transfer of a surplus profit of 526.79 billion rupees to the government for the year ended June 2014, which traders said may reduce the need for proceeds from debt auctions in the near future. Expectations of lower borrowing helped offset initial falls in bonds at the start of the session after data on Tuesday showed consumer price inflation accelerating to a two-month high.
Brent crude oil fell for a fourth straight day on Wednesday to its lowest in more than a year, dropping below $103 a barrel as strong supplies overshadowed fears of disruptions from violence in OPEC member Iraq. "There is likelihood that auction postponements may happen as the government has enough cash balance for now and their expenditure will be bunched up at the end of the month," said Arvind Chari, head of fixed income and alternatives at Quantum Advisors.
The benchmark 10-year bond yield closed at 8.76 percent, its lowest level since Aug. 5 and down 9 bps on the day, its biggest single-day fall since April 17.
The new 10-year bond yield dropped 8 basis points on the day to end at 8.54 percent.
The rally in bond markets comes after prices tumbled earlier this month on falling hopes for interest rate cuts this year after the Reserve Bank of India reiterated its commitment to bring down consumer inflation to 6 percent by January 2016.
Sentiment is, however, expected to remain cautious amid the violence in Iraq and Ukraine, holding the market in a range.
The 10-year benchmark bond yield touched a three-month high of 8.89 percent in intraday trade on Friday.
Reuters
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.
Comments
Post a Comment
You are requested to mentioned your full name with email id while commenting.