The Hindu Business Line : Bonds gain on lower inflation

Bond prices gained as inflation figures for the week ended November 1 were substantially lower than the earlier week. The lower-than-expected cut-off yields for the auctions also helped the rally, said dealers. The cut-off yield for the long-term 2032 paper was 8.21 per cent, lower than the expected 8.25 per cent. The cut-off yield for the short term 2014 paper was 7.37 per cent, lower than the expected 7.38-7.4 per cent. “Dealers are getting into longer bonds as the re are expectations of another rate cut. This expectation and more trading activity are the drivers for the bond market now,” said a bond dealer with a private bank. The total traded volumes on order matching system were at Rs 9,715 crore. The 8.24 per cent 10-year 2018 paper opened at Rs 105.5 (7.42 per cent YTM) and closed at Rs 105.1 (7.48 per cent YTM). The 7.95 per cent 24-year 2032 paper opened at Rs 97.4 (8.2 per cent YTM) and closed at Rs 98.48 (8.09 per cent YTM). It touched a high of Rs 98.85 (8.06 per cent YTM) during day-trade.

— Our Bureau

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