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Our Bureau

Mumbai, May 16

Bond prices rose by around 10 to 20 paise on Wednesday as the cut-off yield for the Rs 6,000-crore auction was perceived by dealers as favourable. Total traded volumes on the order-matching system were Rs 6,535 crore (Rs 3,550 crore). Dealers said the cut-off yield of 8.07 per cent on the 7.55 per cent - 2010 paper, which was auctioned on Wednesday, was below the expected 8.11 per cent. "A few banks bid aggressively in the Rs 6,000-crore auction to meet their SLR requirements," said a dealer at a private bank.

Earlier, Dr Rakesh Mohan, Deputy Governor of RBI, said a cut in the Statutory Liquidity Ratio would depend on the macro and monetary conditions. Market participants reacted positively and interpreted it as a sign that a cut may not happen immediately. The 8.07 per cent-10 year-2017 benchmark paper opened at Rs 99.70 (8.11 per cent YTM) and closed at Rs 99.78 (8.09 per cent YTM), against Tuesday's Rs 99.67 (8.12 per cent YTM). The 7.49 per cent-10 year-2017 opened at Rs 95.30 (8.19 per cent YTM) and closed at Rs 95.69 (8.13 per cent YTM).

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