The Hindu Business Line : Bond prices surge

Bond prices continued its rally with a single day gain of 75 paise on Wednesday. Dealers said Indian bonds were tracking the easing US bond yields. The total traded volume on the order matching system was Rs 8,605 crore (Rs 5,400 crore). Dealers said the US yields rallied from 4.81 per cent to 4.73 per cent.

"The military coup in Thailand might have caused a surge in buying of US treasury bills in the international market. Traders are also expecting a pause in the hike in interest rates during the Federal Open Market Committee meeting on Wednesday," said a dealer at a private bank. The softening of global crude also spurred buying in the domestic bond market.

"In the past few days, PSU banks have been the main buyers in the bond market. But today, traders also were buying and building positions," said a dealer. The 7.59 per cent - 10 year-2016 paper opened at a gap at Rs 99.50 (7.66 per cent YTM), up from Tuesday's close at Rs 99.07 (7.73 per cent YTM). It finally ended at Rs 99.85 (7.61 per cent YTM). The 8.07 per cent-11 year-2017 paper opened at Rs 102.50 (7.71 per cent) and closed at Rs 102.84 (7.66 per cent YTM), against Tuesday's Rs 102.04 (7.77 per cent YTM).

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