Bond yield rises to 7.44% on higher oil prices, global cues
Yields on the 10-year benchmark bond have increased due to high oil prices. The Reserve Bank of India rejected all bids at the treasury bill auction conducted recently. The government aimed to raise ₹23,000 crores through treasury bill sales but f...
By ET Bureau |
Reuters
The 10-year yield closed at 7.44%, a three-and-a-half year high, versus its previous close of 7.39%, CCIL data showed.
Mumbai: Yields on the 10-year benchmark bond increased 5 basis points from their previous close due to high oil prices to their weakest level since March 2023. The 10-year yield closed at 7.44%, a three-and-a-half year high, versus its previous close of 7.39%, CCIL data showed.
Separately, the Reserve Bank of India rejected all bids at the treasury bill auction on Wednesday amid a rise in short term yields. The government had planned to raise ₹23,000 crores through the sale of 91-day, 182-day and 364-day treasury bills. Traders said the cutoff yields likely came in above the central bank's comfort level. The last time RBI cancelled a t-bill auction was in early June.
Read more: Jio Platforms' IPO-linked inflows boost rupee; elevated oil prices spur caution
"High oil prices, global yield pressure, FII selling and global fundamentals, nothing is working in our favour right now. The market is clearly signalling a 50 basis point hike in December, it is also seen from RBIs action in the T-bill auction today," said Anshul Chandak, head of treasury, RBL Bank.
Read more: Sundaram Mutual Fund announces launch of Equity Ex-Top 100 Long Short Fund through its SIF platform Select
The benchmark Brent crude stayed above $110 per barrel after nearing $112 on Tuesday, its highest in five months. Indian markets were shut on Tuesday for Dussehra. Oil prices were at $107 per barrel when Indian markets closed on Monday.
High oil prices stoke inflation concerns, adding pressure on local currency and bonds, as India is a net importer of the commodity.
In the T-bill auction, banks bid at yields at least 15 basis points higher than in the previous week's auction, a trader at a large state-run bank said.
Separately, the Reserve Bank of India rejected all bids at the treasury bill auction on Wednesday amid a rise in short term yields. The government had planned to raise ₹23,000 crores through the sale of 91-day, 182-day and 364-day treasury bills. Traders said the cutoff yields likely came in above the central bank's comfort level. The last time RBI cancelled a t-bill auction was in early June.
Read more: Jio Platforms' IPO-linked inflows boost rupee; elevated oil prices spur caution
"High oil prices, global yield pressure, FII selling and global fundamentals, nothing is working in our favour right now. The market is clearly signalling a 50 basis point hike in December, it is also seen from RBIs action in the T-bill auction today," said Anshul Chandak, head of treasury, RBL Bank.
Read more: Sundaram Mutual Fund announces launch of Equity Ex-Top 100 Long Short Fund through its SIF platform Select
The benchmark Brent crude stayed above $110 per barrel after nearing $112 on Tuesday, its highest in five months. Indian markets were shut on Tuesday for Dussehra. Oil prices were at $107 per barrel when Indian markets closed on Monday.
ADVERTISEMENT
High oil prices stoke inflation concerns, adding pressure on local currency and bonds, as India is a net importer of the commodity.
In the T-bill auction, banks bid at yields at least 15 basis points higher than in the previous week's auction, a trader at a large state-run bank said.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
