The Hindu Business Line : Bond prices gain by 55 paise

Bond prices gained by 55 paise riding on the huge buying interest in government securities, said bond dealers. Total traded volumes on the order matching system were substantially higher at Rs 8,775 crore (Rs 5,885 crore). A dealer with a private bank said easing in liquidity conditions triggered the buying interest. Banks borrowed only Rs 5,500 crore from the Reserve bank under the liquidity adjustment facility. According to bond dealers, most of the banks had covered ahead of reporting Friday. Another dealer said the $2 fall in oil prices taking it to $113 also pulled the prices up. The 8.24 per cent-10 year-2018 paper opened at Rs 95.1 (9 per cent YTM) and touched an intra day high of 95.95 (8.87 per cent YTM). It closed at Rs 95.85 (8.88 per cent YTM), against the previous close of Rs 95.3 (8.97 per cent YTM). A lot of buying interest was also seen in the 8.24 per cent-19 year-2027 paper, which was the last auctioned paper. According to dealers, investors are trying to increase the modified duration of their portfolio in the hope that interest rates will decrease in the long term. The paper opened at Rs 86.2 (9.87 per cent YTM) and closed at Rs 87.3 (9.73 per cent YTM). - Our Bureau

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