Bonds & Rupee retreat after all time high
Profit booking spree seems to have hit bonds with benchmark 10-year yield trading at 5.11% at 2:30 pm.
By ET Bureau |
MUMBAI: Profit booking spree seems to have hit bonds with benchmark 10-year yield trading at 5.11% at 2:30 pm. They have retreated from their six year lows when it touched 4.86% early in the day following coordinated fiscal and monetary measures by policymakers to boost growth last Friday. Yields had touched 4.95 last in reached in 2003. When yields fall, prices rise.
"I feel now in the near term there is no postive trigger for the market. So ten year yields might remain in a range of 4.75 to 5.25%," said a dealer at a debt brokerage.
Dealers say all eyes are now on the IIFCL issue expected this week and at what price it is priced.
The rupee also has taken a breather from the early morning rally to trade at 48.72 against the dollar, just 3 paise stronger than Friday's close. It had risen to 48 level in eary hours of trade.
This is despite BSE Sensex climbing as much as 2.1% to 10,168.25 at 2.30pm. The benchmark is set for its highest close since November 10.
India slashed its key interest rates by 1 percentage point on Friday, its fourth cut in four months, and tried to draw more funds into the country to boost growth as it warned of a tough year ahead. CRR is the part of its deposits that a bank has to park in cash with the RBI. Reverse Repo and Repo are the rates at which RBI borrows and lends funds to banks.
Liquidity has strongly improved after the Friday rate cuts with call money rates trading at 4.50% at 20 pm, with even the weighted average down to 4.63%, lower than Friday's number, as per CCIL.
"I feel now in the near term there is no postive trigger for the market. So ten year yields might remain in a range of 4.75 to 5.25%," said a dealer at a debt brokerage.
Dealers say all eyes are now on the IIFCL issue expected this week and at what price it is priced.
The rupee also has taken a breather from the early morning rally to trade at 48.72 against the dollar, just 3 paise stronger than Friday's close. It had risen to 48 level in eary hours of trade.
This is despite BSE Sensex climbing as much as 2.1% to 10,168.25 at 2.30pm. The benchmark is set for its highest close since November 10.
India slashed its key interest rates by 1 percentage point on Friday, its fourth cut in four months, and tried to draw more funds into the country to boost growth as it warned of a tough year ahead. CRR is the part of its deposits that a bank has to park in cash with the RBI. Reverse Repo and Repo are the rates at which RBI borrows and lends funds to banks.
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Liquidity has strongly improved after the Friday rate cuts with call money rates trading at 4.50% at 20 pm, with even the weighted average down to 4.63%, lower than Friday's number, as per CCIL.
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