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Our Bureau

Mumbai, May 18

Bond prices fell by around 20 paise as profit booking extended for the second consecutive day. Traded volumes on the order matching system were at Rs 1,720 crore (Rs 2,425 crore). Dealers said domestic inflation, which was at 5.44 per cent for the week ended May 5, was higher than the expected 5.3 per cent. Inflation was at 5.66 per cent in the previous week. "Negative sentiment prevailed in the market on higher than expected inflation. Traders now fear RBI could resort to another round of monetary tightening measures," said a dealer at a private bank.

The announcement of a Rs 8,000-crore auction on May 25 also turned market participants cautious. The 8.07 per cent 10 year- 2017 paper opened at Rs 99.85 (8.09 per cent YTM) and closed at Rs 99.43 (8.15 per cent YTM), against the previous close of Rs 99.65 (8.12 per cent YTM). The 7.49 per cent 10 year-2017 paper opened at Rs 95.50 (8.16 per cent YTM) and closed at Rs 95.22 (8.20 per cent YTM) against Thursday's Rs 95.53 (8.15 per cent YTM).

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