Yields at 5-month low as repayments raise demand

Ten-year bonds rose for a third day on speculation investors will put Rs 1,460 crore ($324 million) of funds that matured Wednesday back into debt.

The yield on the benchmark 7.80% note due May 2020 dropped four basis points to 7.51% at the close of trade on Thursday. Earlier, the rate fell to 7.49%, the lowest level since November 27. The price rose 0.31, or 31 paise per Rs 100 face amount, to 102.04.

Yields dropped to the lowest level in five months as a further Rs 25,400 crore came due on Thursday. An auction of Rs 12,000 crore of bonds will also be held on Friday.

“There are expectations that the redemptions may spur favourable bidding in the auction,” said Bekxy Kuriakose, who manages the equivalent of $440 million in domestic debt at L&T Investment Management, part of Larsen & Toubro.