Bonds end little changed as caution sets in before RBI policy outcome
By Dharamraj Lalit Dhutia
MUMBAI, Sept 29 (Reuters) - Indian government bonds ended largely unchanged on Thursday, giving up intraday gains, as caution ahead of the Reserve Bank of India's policy decision on Friday, outweighed the impact of fall in U.S. yields.
The benchmark Indian 10-year government bond yield IN072632G=CC ended at 7.3405% after closing at 7.3340% on Wednesday. Earlier in the day, the yield fell to 7.2660%.
"Market is nervous regarding the monetary policy, considering what is going on globally, and hence the rally was not able to sustain," said Debendra Kumar Dash, senior vice president, treasury, at AU Small Finance Bank.
"Any comment on inflation or policy stance will remain crucial for future rate trajectory," Dash said.
A majority of market participants are expecting the central bank to raise its key interest rate by 50 basis points for a third consecutive time.
The RBI has already raised rates by 140 basis points between May and August to 5.40%, to tackle inflation that has stayed above its tolerance level for eight straight months through August.
Market focus would also remain on any commentary over the prevailing banking system liquidity, which slipped into deficit last week and has oscillated between surplus and deficit since then.
Bond yields had eased earlier in the day, as U.S. yields nosedived after the Bank of England launched an emergency bond buying plan to restore financial stability in markets that were rocked by the new British government's fiscal policy plans.
The 10-year U.S. yield US10YT=RR eased over 30 basis points on Wednesday, after hitting 4.02% earlier in the day for the first time since April 2010. It was last at 3.84%.
Traders also await the Indian government's borrowing calendar for October-March, which is likely to be detailed over the next few days. Analysts expect the market to absorb the bond supplies for the rest of this fiscal year, although at higher yields.
The government is scheduled to borrow a gross 5.86 trillion Indian rupees ($71.54 billion) in October-March. This could increase by another 160 billion rupees after New Delhi failed to raise the planned amount from the sale of floating rate securities in August-September. ($1 = 81.9100 Indian rupees)
Reporting by Dharamraj Lalit Dhutia; Editing by Neha Arora
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。