G-Sec 10-year yields come down 5 bps to 7.39% on Fed signals

Mumbai: The yield on 10-year benchmark government bonds eased 5 basis points to 7.39% on Thursday, its biggest fall since July, prompted by a rally in US Treasuries and modestly lower oil prices. The 10-year yield had closed at 7.44% the previous day.

US Treasury yields eased after comments from the Federal Reserve on the future rate path were interpreted by markets as signalling a less hawkish stance from policymakers. Oil prices declined to $113 per barrel, from $116 a day earlier, according to Reuters. Domestically, while yields have eased, the outlook is that of weakness, with many projecting a yield of 7.70% to 7.75% by December. Axis Bank has forecasted a yield of 8% by June 2027.

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The yield opened at 7.42% on Thursday, and gradually eased during the day to close at 7.39%, CCIL data showed. The government will sell ₹33,000 crore of bonds in its weekly auction on Friday, of which ₹3,000 crore would be sold as a 30-year green bond.

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Rupee ends flat at 95.26

The rupee was nearly unchanged on Thursday, closing at 95.26, versus its previous close of 95.22. The rupee rebounded after hitting its weakest level in 2 weeks as likely intervention by the RBI and softer oil prices offset dollar demand, traders said. Pressure on rupee eased as the dollar index eased to 102.2, from 102.6 amid dovish commentary by the US Fed.