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Mumbai, Aug.18

Bond prices gained by 34 paise on a day that witnessed thin trading volumes. Total traded volumes on the order matching system were down at Rs 3,005 crore (Rs 5,405 crore) when trade resumed after a prolonged weekend. According to bond dealers, the expectation of a higher inflation figure adversely affected bond yields. A bond dealer said tight liquidity conditions prevailed in the market as the banks borrowed close to Rs 35,000 crore from the Reserve Bank under the liquid ity adjustment facility. Liquidity is expected to remain under pressure as an auction of a 19 year paper for Rs 6,000 crore is scheduled this week. The 8.24 per cent-10 year-2018 paper opened at Rs 94.3 (9.13 per cent YTM) and touched an intra-day high of Rs 94.83 (9.05 per cent YTM). It finally closed at Rs 94.63 (9.08 per cent YTM), against the previous close of Rs 94.29 (9.14 per cent YTM). The second highly traded security, the 7.95 per cent-24 year-2032 paper opened at Rs 83.15 (9.78 per cent YTM) and closed at Rs 82.85 (9.82 per cent YTM).

— Our Bureau

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