The Hindu Business Line : Bond prices fall by Rs 2

Bond yields rose to levels last seen in December 2008, with the yields on the 8.24 per cent crossing 7 per cent. Fears of excess supply and lack of trading interest pulled the bond market down, said a dealer with a private bank. On Thursday, bond prices moved downwards the whole day and ended about Rs 2 lower than the earlier close. Trading was extended by 30 minutes as the market waited for the Reserve Bank of India to announce the cut-offs for the buyback.

The cut-off yields announced by the RBI were higher than market expectations. “The papers are illiquid papers and not many traders are holding them. There was some selling after the cut-off was announced, but it tapered off towards the close,” the dealer said. The total traded volumes on the order matching system were to the tune of Rs 6,320 crore (Rs 3,480 crore). The most highly traded 8.24 per cent- 2018 paper opened at Rs 109 (6.89 per cent YTM) and closed at Rs 107.05 (7.17 per cent YTM), against Monday’s close of closed at Rs 109.4 (6.83 per cent YTM). The 6.05 per cent-2019-10 year paper opened at Rs 95.5 (6.68 per cent YTM) and closed at Rs 94.25 (7.0 per cent YTM).

With another auction scheduled for Friday and next, week the market is expecting part of the auction to be devolved on primary dealers, the dealer added.

— Our Bureau

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