The Hindu Business Line : Bonds fall on inflation data

Bond prices fell by over 50 paise reacting to the sharp rise in the latest inflation figures. The total traded volumes on the order matching system stood at Rs 2,065 crore. Inflation, which rose to 5.92 per cent for the week ended March 8, pushed traders to sell in the market. "The sharp rise in domestic inflation indicates that interest rates are not likely to soften in the near future," said a dealer at a private bank. However, traders said that yields could have hardened further but for the cooling of global oil prices, which aided sentiment. Liquidity in the system also showed some improvement compared to last week. Market participants expect prices to gain in the next few days as banks may engage in some `value-buying' ahead of the fiscal-end. The 7.99 per cent -9 year-2017 paper opened at Rs 101.90 (7.697) and ended at Rs 101.75 (7.72 per cent YTM), against the previous close at Rs 102.32 (7.63 per cent YTM). The 8.33 per cent -28 year- 2036 paper opened at Rs 101.50 (8.19 per cent YTM) and ended at Rs 101.02 (8.23 per cent YTM), against the previous close at Rs 102.25 (8.12 per cent YTM). - Our Bureau

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