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Our Bureau

Mumbai, June 27

Negative sentiments continued to rule the bond market due to fears of a rate hike by the US Fed on June 29, a likely increase in domestic interest rates by the Reserve Bank of India and inflation heading northward. There was selling pressure in the first half of trade. Bond prices gained by about 5-10 paise, following statements by the Ministry of Finance, which indicated that the Government might reduce the amount of its auction scheduled for July. The amount for the auction of government securities held in June was increased from Rs 5,000 to Rs 9,000 crore. "Yields on the 10-year paper may touch 8.25-8.30 by December," said a dealer with a private bank. Volumes in the 10-year benchmark paper were hardly worth Rs 65 crore. "It was nominal trading. Nobody is willing to take positions," the dealer said.

The 7.59 per cent-10 year-2016 paper opened at Rs 96.35 (8.13 per cent YTM) and ended trade at Rs 96.5 (8.11 per cent YTM) same as the previous close. The 9.39-5 year-2011 opened at Rs 106.92 (7.7 per cent YTM) and ended at Rs 107.1 (7.66 per cent YTM), marginally higher than Monday's close of Rs 106.97 (7.69 per cent YTM).

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