Indian bond yields little changed as focus remains on oil moves
The benchmark 10-year bond yield ended at 6.2615%, compared with Tuesday's close of 6.2646%.
Pawan Somani, founder of Infinask Advisors cited negative sentiment from the rise in global crude oil prices following continued geopolitical uncertainty. 'Weakness in rupee and cautiousness ahead of Fed outcome resulted in subdued volumes,' he added.
The benchmark Brent crude contract was around $76 per barrel and is up more than 10% in the last four sessions after concerns over supply disruptions rose due to the Middle East conflict.
India imports most of its crude requirements and elevated prices could pose an upside risk to the inflation outlook, thwarting the limited possibility of another rate cut from the Reserve Bank of India.
Indian bond yields, swap rates ease after dovish comments from RBI chief
Bond yields had dipped on Tuesday after dovish commentary from RBI Governor Sanjay Malhotra, who said inflation below the central bank's current projections could open up policy space and that the change in stance does not imply an immediate reversal in the policy cycle.
Earlier this month, the RBI cut its key policy rate by a steeper-than-expected 50 basis points but changed its stance to 'neutral' stance from 'accommodative', leading analysts to suggest the easing cycle has ended.
The minutes of this meeting are due after market hours on Friday.
Traders also await the Federal Reserve policy decision due after Indian market hours. Even though no rate action is anticipated, the major focus would remain on guidance and signals on the quantum of cuts in 2025.
Rates
Indian overnight index swap (OIS) rates ended marginally higher amid shallow trading volumes.
The one-year OIS rate ended at 5.48% and the two-year OIS rate ended at 5.46%. The liquid five-year OIS rate ended at 5.5.68%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
23 minutes ago
- Express Tribune
Profits without productivity and job creation
Listen to article Why is there such disconnect between Pakistan's booming stock market and its broader economy? While the stock market surged by over 85% in both rupee and dollar terms in 2024 and has already climbed another 60% in 2025, placing Pakistan among the world's top-performing markets, manufacturing output, unemployment, and poverty have either deteriorated or remained stubbornly high. The explanation lies in Pakistan's deep-rooted structural imbalances. Heavy government involvement props up certain sectors through targeted interventions while excessively shielding others, which has stunted the growth of competitive industries. This divergence becomes clear when examining sectoral performance. Over two-thirds of recent market gains have come from banking, fertiliser, and oil and gas sectors. A closer look reveals how government policies have driven their profits, often at the cost of broader private sector development. The banking sector alone accounted for 40% of the total index profitability, largely driven by investing in government securities. By the end of 2024, over 95% of bank deposits, roughly Rs26 trillion, were locked in risk-free government bonds and treasury bills. If the government were not such a heavy borrower and interest rates were lower, banks would be forced to take more risk and extend credit to the private sector, including SMEs. The fertiliser sector is another top performer, but its success is built more on market distortions than genuine innovation or efficiency. Dominated by four firms controlling 95% of the market, the industry continues to benefit from subsidised feedstock gas, despite the government withdrawing subsidies for some under IMF pressure. Over the past four years, urea prices have soared by 70%. Pakistani farmers now pay over Rs4,400 for a 50kg bag, compared to around Rs1,200 paid by Indian farmers. While this has boosted corporate profits and stock prices, it has eroded farmers' purchasing power and undercut agricultural productivity. The oil and gas sector's gains come from different forces, but the government's influence is again unmistakable. Progress on new discoveries, circular debt reduction, and early privatisation steps is encouraging. However, a primary driver of profitability has been the sharp rise in energy prices under the IMF-backed reforms. Aligning prices with market rates has strengthened corporate earnings but imposed a heavy financial burden on ordinary citizens. By contrast, sectors like engineering, auto parts, and synthetic textiles, with a few bright spots such as Sazgar Engineering, have seen notable decline. Here, the recent tariff reforms offer a chance for revival. These industries can now expand their domestic footprint and, crucially, pursue global exports. Take auto parts, for instance. As developed countries such as France, Spain, Germany, the US, and Japan reduce their export shares, emerging economies are filling the gap. Thailand, Turkey, and India now each export over $7 billion in auto parts annually, while Indonesia, Malaysia, and Morocco make exports worth between $1.5 and $2 billion. Pakistan's exports, by contrast, are negligible at just $22 million. Experts like Gary Pursell trace this underperformance to excessive micromanagement by agencies such as the Engineering Development Board and the Federal Board of Revenue, which tightly regulate firms' inputs and outputs. High input costs, especially for basic materials like steel still shielded by protective tariffs, also drag down competitiveness. If Pakistan's private sector can seize the opportunity to integrate into global value chains, which account for nearly 70% of global trade, the country could join the ranks of fast industrialising economies. Rather than aiming to compete directly in finished consumer goods, where scale and branding are significant hurdles, Pakistan can position itself as a reliable supplier of auto parts and other intermediate inputs. The government has finally taken meaningful steps through tariff reforms and initial structural adjustments. It is now up to the private sector to respond with innovation, investment, and an export-oriented mindset. Only then can the current stock market rally translate into broad-based industrial growth, job creation, and poverty reduction. Without this shift, from profits propped up by policy distortions to those anchored in true productivity and competitiveness, today's market boom risks remaining a fragile illusion rather than a launchpad for genuine economic transformation. To ensure this transformation takes hold, it will be critical for policymakers to maintain coordinated follow-through on reforms and actively reduce bureaucratic micromanagement, so both businesses and industries can truly thrive. The writer is a member of the PM's Steering Committee on the Implementation of the National Tariff Policy. He previously served as Pakistan's Ambassador to the WTO and as the FAO Representative to the United Nations in Geneva
Express Tribune
a day ago
- Express Tribune
Prada seeks help from Indian artisans
Prada is looking to collaborate with "artisanal footwear" makers in India in a partnership, it said on Friday, two weeks after the Italian luxury group triggered a controversy by debuting ethnic sandals resembling 12th-century Indian ones. After viral photos from a Milan fashion show drew criticism from Indian artisans who make the sandals - named after the historic city of Kolhapur in Maharashtra state - Prada was forced late last month to acknowledge that its new open-toe footwear was inspired by ancient Indian designs. The furore even saw sales of Indian sandals boom, with sellers and artisans seeing the controversy as a way to promote the heritage craft by tapping into nationalist pride. Prada said in a statement to Reuters that it held talks remotely on Friday with the Maharashtra Chamber of Commerce, which represents 3,000 Kolhapuri sandal artisans, and discussed potential opportunities for future collaboration. "The next step will be for Prada's supply chain team to meet a range of artisanal footwear manufacturers," the company said. The Maharashtra Chamber of Commerce said that Lorenzo Bertelli, son of Prada's owners and head of its corporate social responsibility, joined the talks on Friday. The chamber of commerce said that during the talks Prada said it aimed to launch a limited-edition "Made in India" Kolhapuri-inspired collection of sandals in partnership with Indian artisans. India's luxury market is small but growing, with the rich splurging on designer fashion, top end sports cars and pricey watches. Prada does not have any retail stores in India, and its products are usually reserved for the super rich who shop overseas. The sandal scandal left the social media abuzz for days with criticism and sarcastic memes, with Indian politicians, artisans and the Maharashtra Chamber of Commerce demanding due credit to Indian heritage.
Express Tribune
a day ago
- Express Tribune
Pink salt's export potential remains untapped
Beneath Karachi's blistering sun, a salt farmer harvests shimmering sea crystals in a coastal area — a backbreaking labour that yields just Rs1,000 a day. Each grain tells a story of toil, endurance, and the quiet dignity of labour. PHOTO: ONLINE Even though India's ban on Pakistani pink salt has opened up new opportunities for local traders in other international markets, the true potential of the profitable sector remains untapped since Pakistan, till date, has not been able to develop a value-adding system for processing and rebranding what many consider to be the world's healthiest salt. A local salt exporter, Muhammad Riaz, revealed that even in the past, governments were advised to export Pakistan's unique salt with value addition, but none took serious steps while India continued to market Pakistani salt as its own across global markets. "Indian traders are currently obtaining salt through Dubai. During the tenure of Prime Minister Shaukat Aziz, a proposal had been made for Pakistan to export salt directly to other countries rather than allowing India to benefit from it. Presently, Pakistani salt exporters are again emphasizing that salt should not be exported as a raw material but instead should be processed and branded, enabling Pakistan to boost exports and earn valuable foreign exchange," noted Riaz. Sources indicate that the ongoing political tensions between Pakistan and India have severely affected trade, pushing traders on both sides to adopt new strategies. From November 2023 to October 2024, Pakistan remained a major exporter of pink salt. During this period, 3,789 shipments of Himalayan salt were exported, marking a 10 percent increase compared to the previous year. In 2023, India had imported 462 metric tons of Himalayan pink salt from Pakistan, which increased to 642 metric tons in 2024. However, these numbers are still significantly lower compared to 2018 (74,457 metric tons) and 2019 (72,631 metric tons). After India imposed a direct ban on the import of Pakistani salt in 2019, trade was completely halted. As a result, India lost access to the inexpensive pink salt it used to source from Pakistan. However, Indian traders continue to import this salt through other countries, rebrand it, and sell it under their own labels. Although the volume of trade has decreased, indirect exports of Pakistani salt to India are still ongoing. For years, India earned substantial profits by purchasing this salt at low prices and selling it for much more. Previously, India used to receive cheap salt via the Wagah land route, but now it has to pay significantly more to acquire it. Since the complete suspension of trade through Wagah following the Pahalgam incident, relations between the two countries have become increasingly strained. In the meantime, Indian traders have started importing Pakistani pink salt via third countries. In this way, Indian companies are continuing to trade Pakistani salt through indirect means and earning profits through value addition. After the Pulwama attack in 2019, India imposed a 200 per cent tariff on Pakistani goods, which drastically reduced trade. As a result, exports of Pakistani pink salt to India became negligible. In 2025, a complete ban was enforced on salt trade, and now it is expected that even indirect trade through third countries may come to a halt. Due to the halt in the import of Pakistani Himalayan pink salt, local prices in India have surged. Salt that was previously sold for 45 to 50 Indian rupees per kilogram is now priced at up to 150 Indian rupees per kilogram. Hence, India is now looking towards countries like the United Arab Emirates, Malaysia, Iran, Australia, and Afghanistan to meet its salt requirements. In the meanwhile, during the first five months of 2025, Pakistan's salt exports to China increased by 38 per cent. Exporters say that in Punjab, the Mines and Minerals Department is actively extracting salt from mines, and salt reserves have been leased to the private sector. This has enabled private companies to play a more active role in increasing exports. "The government needs to stop the export of raw salt entirely and focus on value-added products," implored Riaz.
