The Hindu Business Line : Bonds fall; policy cues awaited

Bond prices fell sharply ahead of the monetary policy announcement. Volumes were also lower. A bond dealer with a public sector bank said: “The euphoria over the fall in crude oil prices appears to be over. Today, the market pulled back and is waiting for the policy announcements.” Total traded volumes on the order matching system were at Rs 2,840 crore (Rs 3,455 crore). “If there is any kind of monetary action in the policy or any signal that the RBI may take further action if inflation does not come down or inflation expectation is not anchored, then we may see yields on the 10-year benchmark touch 9.5 per cent again,” the dealer said. The 8.24 per cent-10 year- 2018 benchmark paper opened at Rs 95 (9.02 per cent YTM) and closed at Rs 94.2 (9.15 per cent YTM), against the previous close of Rs 94.82 (9.05 per cent YTM). The 8.28 per cent- 24 year-2032 paper opened at Rs 87.7 (9.6 per cent YTM) and closed at Rs 87.01 (9.69 per cent YTM), against the previous close of Rs 88.08 (9.56 per cent YTM).

— Our Bureau

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