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Our Bureau

Mumbai, May 21

Bond prices surged by around 40-50 paise as the RBI did not schedule a Market Stabilisation Scheme auction this week to drain out cash from the system. Total traded volumes on the order-matching system were higher at Rs 5,160 crore (Rs 1,720 crore). "There is no MSS auction this week and there has been some easing in liquidity conditions. This has boosted the buying sentiment in the bond market," said a dealer at a private bank. Under the liquidity adjustment facility, the RBI lent around Rs 12,000 crore to banks through the repo window, against Rs 20,000 crore on Friday.

Traders said there was also a good demand expected next week as bond redemptions worth over Rs 21,000 crore are due. The 8.07 per cent-10 year-2017 benchmark paper opened at Rs 99.50 (8.14 per cent YTM) and closed at Rs 99.81 (8.09 per cent YTM), against Friday's close at Rs 95.72 (8.12 per cent YTM). The 7.49 per cent-10 year-2017 paper, which is currently most active, opened at Rs 95.44 (8.17 per cent YTM) and closed at Rs95.72 (8.12 per cent YTM), against the previous close at Rs 95.22 (8.20 per cent YTM).

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