Bonds seen lower ahead of borrowing programme
Bonds are trading weak on the first day after the government announced the borrowing programme for the new fiscal, with the yield on the benchmark 10-year paper rising 10 bps to trade at 7.11%.
By ET Bureau |
MUMBAI: Bonds are trading weak on the first day after the government announced the borrowing programme for the new fiscal, with the yield on the benchmark 10-year paper rising 10 bps to trade at 7.11%.
Traders say that RBI Deputy Governor Rakesh Mohan's statement that there will be no private placement of bonds has brought further bearishness in the market. They add that bonds will remain under pressure in the coming days.
"Although the amount of buy backs announced by the RBI look sufficient, a lot will depend on the choice of bonds and the timing of operations," says Prasanna Patankar, senior vice president at STCI Primary Dealership. "The mood is not very good and yields could rise from here," he added.
After market hours last week, RBI said it would buy back Rs 80,000 crore of bonds between April and September and said MSS bonds of nearly Rs42,000 crore will mature in this period, buttressing the liquidity in the system.
The rupee weakened on Monday as the dollar strengthened against Asian currencies, with losses in the share market also affecting sentiment. It traded at 51.11 against the dollar, down from its 50.60 close on Friday.
The dollar rose against other major currencies on Monday, as comments about euro zone fiscal responsibility and weaker stock markets affected sentiment towards riskier emerging market assets .
Traders say that RBI Deputy Governor Rakesh Mohan's statement that there will be no private placement of bonds has brought further bearishness in the market. They add that bonds will remain under pressure in the coming days.
"Although the amount of buy backs announced by the RBI look sufficient, a lot will depend on the choice of bonds and the timing of operations," says Prasanna Patankar, senior vice president at STCI Primary Dealership. "The mood is not very good and yields could rise from here," he added.
After market hours last week, RBI said it would buy back Rs 80,000 crore of bonds between April and September and said MSS bonds of nearly Rs42,000 crore will mature in this period, buttressing the liquidity in the system.
The rupee weakened on Monday as the dollar strengthened against Asian currencies, with losses in the share market also affecting sentiment. It traded at 51.11 against the dollar, down from its 50.60 close on Friday.
The dollar rose against other major currencies on Monday, as comments about euro zone fiscal responsibility and weaker stock markets affected sentiment towards riskier emerging market assets .
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