Written by Dharamraj Dutia
Mumbai, January 2 (Reuters) –Indian government bond yields edged higher in the second session of the new year as traders awaited the quarter’s first bond sale, which is expected to bring in large supplies.
Benchmark 10-year bond yield IN071833G=CC The stock was trading at 7.2054% as of 10 AM IST on Tuesday after closing at 7.1969% in the previous session.
“We may not see any big moves until the government bond auction, but until then, bond yields will remain range-bound and volumes will be low,” said a trader at a private bank.
“Still, the 7.20% level is very significant and is unlikely to be lifted easily.”
India’s states aim to raise 160 billion rupees ($1.92 billion) through bond sales later in the day as they embark on a massive supply schedule in the final quarter of the fiscal year.
Each country is record Bond sales in the January-March period totaled 4.13 trillion rupees, higher than market expectations.
As the days pass, market participants are likely to react enthusiastically to factors such as buying from. foreign investor similarly national bankboth are expected to be on the buy side this month.
Although state-run financial institutions made large-scale purchases in the last week of 2023, foreign investment There was a notable increase in the last three months of the year, with inflows reaching a six-year high.
Traders also believe that the bond yield curve isBull Steepen“We expect interest rate cuts by central banks in the US and India this year.
Bull steepening occurs when yields on bonds with shorter maturities fall faster than on bonds with longer maturities.
On the other hand, the US 10-year bond yield is US10YT=RR The index remained in a key range of 3.85% to 3.90% in Asian time, as investors expect the Fed to cut interest rates as early as March. fed watch
(1 dollar = 83.2930 Indian rupees)
Report by Dharamraj Dhutia.Editing: Sohini Goswami