Bonds trading weaker
Bonds are trading weaker as the extra borrowings that the government is set to hit the market in the coming weeks, is weighing on traders' minds.
By ET Bureau |
MUMBAI: Bonds are trading weaker on Wednesday as the extra borrowings that the government is set to hit the market in the coming weeks, is weighing on traders' minds.
While the old benchmark 8.24% paper maturing in 2018 rose 4 basis points to 6.58%, the new benchmark 6.05% paper expiring in 2019 is trading 3 bps higher at 6.20%. When yields rise, prices fall.
"The mood continues to remain bearish with the prospect of more bonds hitting the market in the coming days" says Anoop Verma, associate vice president at DCB. "There was an annoucement of auction of state bonds that too is weighing," he said.
Bonds fell by the most in many weeks after the government yesterday reduced excise and service taxes to revive economic growth. The latest fiscal stimulus measures came after Standard & Poor���s lowered India's credit outlook to negative from stable, saying the nation���s spending plans are ���not sustainable.���
The rupee rose on Wednesday morning because of Asian equities gaining across the board, to trade at 49.83 versusu 49.86 against the dollar level on Tuesday. Dealers said yesterday���s Fed Governor Ben Bernanke comments have brought a sense of relief across markets.
Liquidity was good with call money available at a weighted average of 4.09%, near reverse repo rate, at 12 noon, as per CCIL.
While the old benchmark 8.24% paper maturing in 2018 rose 4 basis points to 6.58%, the new benchmark 6.05% paper expiring in 2019 is trading 3 bps higher at 6.20%. When yields rise, prices fall.
"The mood continues to remain bearish with the prospect of more bonds hitting the market in the coming days" says Anoop Verma, associate vice president at DCB. "There was an annoucement of auction of state bonds that too is weighing," he said.
Bonds fell by the most in many weeks after the government yesterday reduced excise and service taxes to revive economic growth. The latest fiscal stimulus measures came after Standard & Poor���s lowered India's credit outlook to negative from stable, saying the nation���s spending plans are ���not sustainable.���
The rupee rose on Wednesday morning because of Asian equities gaining across the board, to trade at 49.83 versusu 49.86 against the dollar level on Tuesday. Dealers said yesterday���s Fed Governor Ben Bernanke comments have brought a sense of relief across markets.
Liquidity was good with call money available at a weighted average of 4.09%, near reverse repo rate, at 12 noon, as per CCIL.
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