The Hindu Business Line : Bond yields rise

Bond yields hardened on tight liquidity and fears that inflation could rise further. Bond dealers said that the market was overdone, and the fall in prices was expected. “Bond yields are likely to touch 8 per cent and maybe move slightly higher, because the sentiment is negative as Government borrowing is yet to start and the RBI may soon announce state auctions, which will absorb more liquidity from the system” said a bond dealer with a public sector bank.

The outflow of dollars from the domestic equity market is also putting pressure on the rupee, which is adding to the negative sentiment, the dealer said. Total traded volumes on the order-matching system were at Rs 6,460 crore (Rs 9,890 crore). The 8.24 per cent-10 year-2024 opened at Rs 103.14 (7.78 per cent YTM) and closed at Rs 102.82 (7.82 per cent YTM), against the previous close of ended at Rs 103.06. The 7.59 per cent- 8 year-2016 paper opened at Rs 98.28 (7.88 per cent YTM) and closed at Rs 98.03 (7.93 per cent YTM), against the previous close of Rs 98.24 (7.89 per cent YTM).

— Our Bureau

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