The Hindu Business Line : Bond prices fall by 38 paise

Bond prices fell by 38 paise, despite lower inflation figures. With inflation figures being lower than the previous week’s, the markets rallied in the first half of the trade, said a dealer with a private bank. However, profit booking in the latter half of the trade pulled down prices, he added. Market sentiments became bearish as the cut-offs for the underwriting commission for primary dealers announced by the Reserve Bank of India were much higher than market expec tation. The higher commission is probably because the RBI is not expecting a good response for the auction, said a bond dealer. The RBI announced an underwriting commission of 1.50 paise for the 7.46 per cent-2017 paper, as against the market expectation of 0.55 paise. Similarly, the market expected a cut-off commission of 1.20 paise for the 7.40 per cent-2035 paper, against the cut-off of 2.35 paise announced by the RBI. Total traded volumes on the order matching system were at Rs 10,115 crore (Rs 10,040 crore). The benchmark security opened at Rs 121.75 (5.25 per cent YTM) and touched an intra-day high of 122.15 (5.20 YTM). It closed at 121.41 (5.29 per cent YTM), against the previous close of Rs 121.79 (5.24 per cent YTM). The 7.95 per cent-2032 paper opened at Rs 120.60 (6.26 per cent YTM) and closed at Rs 120.25 (6.29 per cent YTM).

— Our Bureau

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