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Business Recorder
02-07-2025
- Business
- Business Recorder
India bonds tick up as foreign flows, ample liquidity lift sentiment
MUMBAI: Indian government bonds rose slightly on Wednesday, buoyed by foreign inflows and a growing liquidity surplus in the banking system. The yield on the benchmark 10-year bond ended at 6.2892%, compared with its previous close of 6.2927%. The five-year 6.75% 2029 bond was at 5.9522% after ending at 5.9653% on Tuesday. Bond yields move inversely to prices. Traders lapped up debt through the day as the central bank refrained from announcing further liquidity withdrawal measures, easing earlier concerns. 'The Reserve Bank did not announce any fresh VRRR auctions, which was a relief for the market,' said Umesh Tulsyan, managing director at Sovereign Global Markets. 'Foreign investors have also been buying in the last three sessions, which is another positive.' These investors bought bonds worth 104 billion rupees ($1.21 billion) on a net basis over the last three sessions. India bond yields dip, tracking US Treasury peers, oil prices This helped push up the banking system liquidity surplus to 3.3 trillion rupees as on July 1. A seven-day VRRR is set to mature on Friday, after which traders will closely watch for rollovers as call money rates have once again dipped below the RBI's repo rate, they said. India's weighted average interbank call money rate fell to 5.28% and weighted average TREPS were at 5.14%, a day after touching the RBI's policy rate. Meanwhile, DBS Bank expects India's growth and inflation to undershoot the central bank's estimates for this financial year, pegging growth estimates at 6.3% and inflation at 3.5% compared to the RBI's projections of 6.5% and 3.7%. Rates India's overnight index swap rates barely changed during the day amid shallow trading volumes. Traders are eyeing a spread compression trading strategy between short and long-end overnight index swap rates. The one-year OIS rate was steady at 5.52%, while the two-year OIS rate was little changed at 5.48%. The liquid five-year dipped 1 basis point to 5.67%.
Economic Times
07-05-2025
- Business
- Economic Times
Indian bond yields dip as traders see buying window
Indian government bond yields dropped in early deals on Wednesday, despite caution after India attacked Pakistan and Pakistan-administered Kashmir, with traders pointing to likely bargain buying by investors who lightened positions over the last few days. ADVERTISEMENT The benchmark 10-year yield was at 6.3416% as of 10:50 a.m. IST, compared with its previous close of 6.3508%. "Traders had lighter books, because they had previously sold on geopolitical tensions, and yesterday (Tuesday) we saw a good participation in the RBI's open market operation," said Umesh Tulsyan, managing director at Sovereign Global Markets. Traders are likely building their positions back following India's strikes on Pakistan, according to Tulsyan. "We are seeing strong buying in the market and expect the momentum to continue," he said. New Delhi said it conducted a military operation in Pakistan across nine locations in the south Asian neighbour's territory as well as Pakistan-administered Kashmir. Investors are closely watching the news for any response from Pakistan for deciding on further trading action. ADVERTISEMENT Foreign banks turned net bond sellers on Monday, ending a three-week buying streak. They sold bonds worth 22.7 billion rupees on a net basis on Tuesday. Primary dealers also emerged as sellers, paring positions worth 33 billion rupees. Meanwhile, the Reserve Bank of India is set to auction treasury bills worth 190 billion rupees ($2.25 billion) later in the day. ADVERTISEMENT Traders will also watch for the U.S. Federal Reserve's policy decision due later on Wednesday, where the Fed is widely expected to keep the interest rates unchanged. ADVERTISEMENT India's overnight index swap rates fell on receiving bias, tracking moves in the secondary government bond market. The one-year OIS rate fell 3 basis points to 5.60%, while the two-year OIS rate dropped 2 basis points to 5.47%, and the most liquid five-year OIS rate was down 4 basis points at 5.58%. ($1 = 84.4990 Indian rupees) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
