The Hindu Business Line : Bonds down 50 paise

Bond prices opened the day about a rupee lower than the previous close but recovered to end the day just 50 paise down. Prices initially reacted to the RBI’s hike of the repo rate and the Cash Reserve Ratio. Market participants said that prices were volatile as volumes remained thin. Total traded volumes on the order matching system were at Rs 2,400 crore (Rs 3,035 crore). “Banks are currently sitting on very light positions after so many days of prolonged sel ling. So, the buying interest came later in the day from investors like insurance companies and pension funds as well as banks which were short covering,” said a dealer at a private bank. Dealers expect the sentiment in the bond market to stay bearish as they anticipate the RBI to hike rates further during the year. The 10-year yield could range between 8.75 per cent- 9 per cent in the short term, they said. The 8.24 per cent-10 year-2024 paper opened at Rs 96.40(8.79 per cent YTM) and closed at Rs 97.33 (8.64 per cent YTM), against the previous close at Rs 97.85 (8.56 per cent YTM). The 8.33 per cent -28 year- 2036 paper opened at Rs 93.04 (9.01 per cent) and closed at Rs 92.50 (9.07 per cent YTM).

— Our Bureau

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