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Our Bureau

Mumbai, Aug. 8

The bond market saw a rally after the auction of the 10-year and five-year government securities. The cut-off prices were slightly higher than expectations and the auctions were well bid, said dealers. Hopes of a pause in the rate hikes by the US Federal Reserve also helped boost sentiments.

The cut-off for the five-year paper was Rs 105.76, and Rs 95.51 for the 10-year paper. "The 10-year paper saw a rally of about 50 paise post the announcement of the cut-off price and the five-year paper went up by about 25 paise," said a dealer with a private bank.

The 7.59 per cent 10-year 2016 benchmark paper opened at Rs 95.58 (8.26 per cent YTM), touched a high of Rs 96 (8.19 per cent YTM) and ended at 95.99 (8.19 per cent YTM) against the previous close of Rs 95.62 (8.25 per cent YTM). The 9.39 per cent 5-year 2011 opened at Rs 105.94 (7.90 per cent YTM), touched a high of Rs 106.2 (7.84 per cent YTM) and closed at Rs 106.2 (7.84 per cent YTM). The 10-year yield could ease to 8.15 per cent, if there is no rate hike; and inch up to 8.25 per cent, if there is a rate hike," said another dealer.

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