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Our Bureau

Mumbai, April 25

Bond prices rose marginally after the auction of two government papers as the cut-off prices were in line with market expectations. Though there was no fundamental reason for a rally, the positive factor in the near term is ample liquidity, said a dealer. The 7.59 per cent 10-year 2016 paper opened at Rs 101.75 (7.34 per cent YTM) and closed at Rs 101.70 (7.35 per cent YTM), five paise higher than Monday's level of Rs 101.65 (7.35 per cent YTM).The 9.39 per cent 5-year 2011 paper opened at Rs 110.48 (6.94 per cent YTM) and ended trade at Rs 110.36 (6.97 per cent YTM) , almost unchanged from the previous close of Rs 110.37 (6.97 per cent YTM). According to a bond dealer with a private bank, market players are wary of prices appreciating on the back of the excess liquidity, as they feel this may prompt RBI to reintroduce the Market Stabilisation Scheme to mop up the surplus liquidity. Therefore, a correction seems likely, he said."

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