The Hindu Business Line : Bonds fall on higher inflation rate

Bond prices fell by over 30 paise reacting to the higher-than-expected inflation numbers. Domestic inflation was at 7.41 per cent for the week ended March 29. Total traded volumes on the order-matching system were at Rs 3,350 crore (Rs 3,520 crore). "The view that the RBI will hike the Cash Reserve Ratio before the credit policy has further gained ground with these high inflation numbers," said a dealer at a private bank.

Market participants said that the bearish sentiment worsened as the cut-off yield of the auction held on Friday was higherthan- expected. The 10-year yield has crossed 8 per cent after almost a year, said traders. "There is surplus liquidity in the system and we expect more Market Stabilisation Scheme auctions," said a dealer.

The 7.99 per cent-9 year-2017 opened at Rs 99.60 (8.05 per cent YTM) and ended at Rs 99.73 (8.03 per cent YTM) against the previous close of Rs 100.05 (7.98 per cent YTM). The 8.33 per cent-28 year-2036 paper opened at Rs 97.21 (8.59 per cent YTM) and closed at Rs 97.10 (8.60 per cent YTM), against the previous close at Rs 97.40 (8.57 per cent YTM). - Our Bureau

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