The Hindu Business Line : Bonds fall tracking US yields

Bond prices fell by around 20-25 paise on Wednesday following the hardening of the 10-year US yields to 5.28 per cent from 5.16 per cent. Domestic yields for the 10-year paper went up by around four basis points from 8.37 per cent to 8.41 per cent. The total traded volumes on the order matching system were Rs 3,685 crore (Rs 2,780 crore).

Bids for the 91-day Treasury bills were fully subscribed. The Reserve Bank of India received 117 bids for Rs 9,997.75 crore while it accepted 45 bids for the notified amount of Rs 3,500 crore. The cut-off price for the 91-day T-bills was at Rs 98.10 (7.77 per cent YTM). The bids for the 182-day Treasury bills were also fully subscribed. The RBI received 114 bids for Rs 9,925 crore while it accepted 15 bids for the notified amount of Rs 2,500 crore. The cut-off price was at Rs 96.25 (7.81 per cent YTM).

"There is excess cash in the system but some of the additional liquidity will be sucked out by way of various auctions. This has made the market participants wary, attributing to the bond prices trading at low levels," said a dealer with a private bank. The 7.49 per cent-10-year paper opened at Rs 93.90 (8.41 per cent YTM) and closed at Rs 93.96 (8.4 per cent YTM), against the previous close of Rs 94.18 (8.37 per cent YTM). The 8.07 per cent-10-year paper opened at Rs 98.57 (8.29 per cent) and closed at Rs 98.89 (8.24 per cent YTM), against the previous close of Rs 99 (8.22 per cent YTM).