• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai, Dec. 30 Bond prices rallied by over Rs 2 on Tuesday on expectations that the Reserve Bank of India would cut key interest rates soon.

The yields on the 10-year benchmark Government-security fell 5.27 per cent, the lowest in the last 4-5 years, said bond dealers.

“The expectation is that the RBI will cut the reverse repo rate by 50 basis points to 4.5 per cent, which is why the G-sec yield fell to 5.25 per cent. In case the cut is more than 50 basis points, the yield on the benchmark security could go up to 5 per cent,” said a bond dealer with a private bank.

According to market participants, the RBI may announce a rate cut by January 1. “ If the Government wants to take advantage of lower borrowing costs, the RBI may announce the cut before the auctions scheduled for January 2, 2009,” the dealer said.

The total traded volumes on the order matching system were higher at Rs 15,960 crore, (Rs 12,375 crore).

The 8.24 per cent-10 year-2018 paper opened Rs 119.88 (5.48 per cent YTM) and closed at Rs 121.62 (5.27 per cent YTM), against the previous close of Rs 119.35 (5.54 per cent YTM).

The 7.56 per cent-6 year-2032 paper opened at Rs 117.3 (6.50 per cent YTM) and closed at Rs 119.65 (6.33 per cent YTM).

More Stories on : Debt Market | Govt Bonds

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line