The Hindu Business Line : Bonds end lower in volatile trade

Bond prices were volatile as they fell by around 85 paise during the day but recovered to close 10 paise lower than the previous close. Total traded volumes on the order matching system were at Rs 1,835 crore. Dealers said that prices were volatile as volumes were thin earlier in the day. “Prices crashed as statements from the Ministry of Finance over the weekend implied that a rate hike was absolutely imminent. But the RBI Governor, Dr Y.V. Reddy’s statements were softer than expected and helped the market recover,” said a dealer at a private. Bond dealers said that prices could be volatile and reactive in the next few days. “The announcement after market hours of three state development loan auctions for a total of Rs 2,300 crore would be additional supply in the market and put pressure on prices,” said a dealer. The 8.24 per cent-10 year-2018 benchmark paper opened at Rs 96.90 (8.71 per cent YTM) and touched an intra-day low of Rs 96.60 (8.76 per cent YTM). It ended at Rs 97.35 (8.64 per cent YTM), against the previous close at Rs 97.45 (8.63 per cent YTM). The 8.24 per cent-19 year-2027 paper opened at Rs 90.20 (9.36 per cent YTM) and fell to a low of Rs 89.70 (9.42 per cent), and ended at Rs 89.90 (8.39 per cent YTM).

— Our Bureau

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