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Time of India
13-05-2025
- Business
- Time of India
Foreign banks dump $3 billion worth g-secs amid India-Pak tensions
Mumbai: Foreign banks and primary dealers dumped nearly $3 billion worth of Indian government securities over Thursday and Friday amid escalating India-Pakistan tensions . But traders expect them to return as geopolitical risks showed signs of cooling over the weekend, likely lowering yields by 4-5 basis points Tuesday. Traders believe the 10-year benchmark is likely to settle near 6.32-6.34%, following the recent border de-escalation and ceasefire announcement. They said the sudden selling last week was driven by concerns of a wider military conflict after cross-border strikes intensified, triggering a rush to pare exposure to risk assets. The 10-year benchmark yield had spiked nearly 10-12 basis points recently. Bonds Corner Powered By Foreign banks dump $3 billion worth g-secs amid India-Pak tensions Traders believe the 10-year benchmark is likely to settle near 6.32-6.34%, following the recent border de-escalation and ceasefire announcement. Is a US recession imminent and what would be the impact on India? How should we manage a robust portfolio in this scenario? Will NaBFID successfully navigate offshore bond market? Indian bond yields snap 7-week falling streak due to border conflict Indian bond yields climb as traders panic sell on widening border conflict Browse all Bonds News with While there was sharp movement in G-sec yield last week, it was not primarily due to foreign investors pulling out and trader positioning in response to geopolitical uncertainty only but also responding to the US yield movement. This has caused a pullback in yields from the recent highs around 6.44% toward the previous consolidation zone 6.32-6.34%. Live Events Global cues, especially US Treasury yields rising 70-80 basis points over a few days, are also influencing India's fixed income market. "The 10-year yield may cool off temporarily to the 6.32-6.34% levels due to the ceasefire and position unwinding, but that's just a knee-jerk move," said Ashhish Vaidya, managing director & head - Treasury & Markets, DBS Bank India. "The broader short term tone remains cautious, with upward pressure persisting unless global yields, especially in the US, begin to ease meaningfully, which will likely set the trend for making the Em debt more attractive." Yields on 10-year G-sec, which was at 6.3% on 23 April has risen 6.44% at the end of last week. In the longer term, if RBI cuts the repo rate to 5.50%, experts say, yields could fall to 6%, offering investors who entered at 6.40%-6.44% a potential gain and additional returns, higher than earlier estimates. "There have been de-escalations on the border and a cease fire, so I do expect bond yields to soften by about 4 basis points on Tuesday and I am expecting yields to close at about 6.33%," said Mataprasad Pandey, vice president, Arete Capital Services. "I had given an investment call on Thursday when yields went up to 6.44% to 'buy.' In the longer term, Pandey said that assuming RBI cuts rates to a terminal repo of 5.50%, yields will likely fall to 6%. In such a scenario, investors who bought when yields were at 6.40-6.44% would see more capital appreciation.
Yahoo
06-02-2025
- Business
- Yahoo
Foreigners step up India bond purchases before anticipated interest rate cut
By Dharamraj Dhutia MUMBAI (Reuters) - Indian government bonds are seeing increased buying interest from foreign investors ahead of an anticipated interest rate cut from the Reserve Bank of India this week. Foreigners have net bought 182 billion rupees ($2.09 billion) worth of debt in the past seven days, surpassing the aggregate purchases from these investors in the previous 19 weeks, clearing house data showed. "I would expect the central bank to start with a token rate cut of 25 basis points this week," said Ashhish Vaidya, managing director and treasurer of global financial markets at DBS Bank India. Portfolio managers that are underweight on Indian bonds have started rebalancing their portfolios, as they might not want to miss out on the rally and underperform the global bond indexes, Vaidya said. Overall foreign purchases of Indian bonds with no investment limit have surpassed the $20 billion mark since JPMorgan announced the inclusion of Indian debt in September 2023. The RBI's monetary policy decision is due on Friday and markets widely expect a 25-basis-point rate cut. Expectations were further bolstered by the central bank's announcement of a mega liquidity infusion package and its bond purchase in the secondary market. The 10-year benchmark bond yield has eased 20 basis points from its highs hit three weeks ago, while overnight index swap rates have dipped by over 30 basis points in the same period. Investors point to the risk of reversal of these flows, especially from shorter-term bonds, if the central bank does not deliver a rate cut. "RBI's inaction could lead to disappointment and a sell-off in bond markets, pushing bond yields higher. The lack of a rate cut could increase volatility in bonds as investors reassess their positions," said Manish Bhargava, CEO at Straits Investment Management. "Without a cut, 2-year and 5-year bond yields could rise as markets push out rate cut expectations." ($1 = 87.1520 Indian rupees) Sign in to access your portfolio
Reuters
06-02-2025
- Business
- Reuters
Foreigners step up India bond purchases before anticipated interest rate cut
MUMBAI, Feb 5 (Reuters) - Indian government bonds are seeing increased buying interest from foreign investors ahead of an anticipated interest rate cut from the Reserve Bank of India this week. Foreigners have net bought 182 billion rupees ($2.09 billion) worth of debt in the past seven days, surpassing the aggregate purchases from these investors in the previous 19 weeks, clearing house data showed. "I would expect the central bank to start with a token rate cut of 25 basis points this week," said Ashhish Vaidya, managing director and treasurer of global financial markets at DBS Bank India. Portfolio managers that are underweight on Indian bonds have started rebalancing their portfolios, as they might not want to miss out on the rally and underperform the global bond indexes, Vaidya said. Overall foreign purchases of Indian bonds with no investment limit have surpassed the $20 billion mark since JPMorgan announced the inclusion of Indian debt in September 2023. The RBI's monetary policy decision is due on Friday and markets widely expect a 25-basis-point rate cut. Expectations were further bolstered by the central bank's announcement of a mega liquidity infusion package and its bond purchase in the secondary market. The 10-year benchmark bond yield has eased 20 basis points from its highs hit three weeks ago, while overnight index swap rates have dipped by over 30 basis points in the same period. Investors point to the risk of reversal of these flows, especially from shorter-term bonds, if the central bank does not deliver a rate cut. "RBI's inaction could lead to disappointment and a sell-off in bond markets, pushing bond yields higher. The lack of a rate cut could increase volatility in bonds as investors reassess their positions," said Manish Bhargava, CEO at Straits Investment Management. "Without a cut, 2-year and 5-year bond yields could rise as markets push out rate cut expectations." ($1 = 87.1520 Indian rupees)
