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Government Securities (G-Secs) yields dropped on Thursday, following sharp decline in US Treasury yields after the US Fed left the benchmark interest rates unchanged at 5.25- 5.50 per cent for the third straight meeting even as its rate setting panel signalled it expects 75 basis points rate cut in 2024 from the current levels.
The yield of the 10 year benchmark G-Sec (coupon rate: 7.18 per cent) fell about 6 basis points (bps) to close at 7.1969 per cent (previous close: 7.2581 per cent), with its price rising 42 paise to close at Rs 99.87 (Rs 99.45).
Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, observed that the rally in the US Treasury yields had a rub-off effect on the Indian G-Sec market.
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He expects the 10-year G-Sec yield will hover around 7.20 per cent level as retail inflation is likely to be sticky for a few months.
Nuvama, in a report, said yields end the day lower after FOMC hints at more easing ahead. ”10-year benchmark (7.18 GS 2033) yield opened the day lower at 7.21 per cent tracking a sharp fall in treasury yields overnight after FOMC hinted for more easing in the next two years.
“The 10-year point fell further to 7.18 per cent in the afternoon, and closed at 7.20 per cent vs 7.26 per cent in previous close. Crude oil price was higher at $74.40/barrel during the opening hours – aided by lesser sharp moves in the USD and traded with an upward bias through the day,” per the report.
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