The Hindu Business Line : Bond market dull ahead of auction

The bond market was dull ahead of the auction of Rs 9,000 crore worth government paper. Bond prices were down by about 18 paise in a market, which did not see much activity. On Friday, the RBI also announced auction of Rs 4,000 crore worth government securities under the market stabilisation scheme. Total traded volumes on the order matching system were Rs 3,220 crore.

A bond dealer with a private sector bank said that it is difficult to guess the correct amount of liquidity, as there is lot of IPO money in the system, right now. “The liquidity is ample, so the central bank will try to suck out liquidity.

Therefore, the market is anticipating the auctions under market stabilisation scheme. That is why yields on the shorter end moved up substantially,” the dealer said. The 7.99 per cent-2017-9-year paper opened at Rs 103.1 (7.52 per cent YTM) and closed at Rs 103.19 (7.5 per cent YTM), against the previous yield of 7.5 per cent. The 8.33-per cent-2036-29-year paper opened at Rs 105.55 (7.84 per cent YTM) and closed at Rs 104.49 (7.84 per cent YTM).

— Our Bureau

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