India Bonds Fall On Profit Booking Ahead Of Fresh Supply
Tuesday,
19-Mar-2019
10:40 AM (IST)
Indian government bonds were lower in morning trade as some investors booked profits ahead of fresh supply of notes this week. The benchmark 7.17% bond maturing in 2028 changed hands at 97.99 rupees, yielding 7.48%, against 98.01 rupees, highest since Feb. 13, yielding 7.48%, yesterday. The 7.26% bond maturing in 2029 was at 99.48 rupees, yielding 7.33%, against 99.59 rupees and a 7.32% yield yesterday. Indian states plan to raise at least 109 billion rupees by selling five-year to 15-year securities today, while the federal government will issue bonds worth 180 billion rupees on Mar. 22, the last planned auction for this fiscal year that ends Mar. 31. The weekly debt sale includes 80 billion rupees of the 2029 note. Demand for India bonds in the next fiscal year is a concern, as state-owned banks are seeing lower deposit growth, Jain said. He sees the 2029 yield in a 7.25%-7.50% band. India plans to raise 7.10 trillion rupees through bonds in the next fiscal year. New Delhi will detail the market borrowing calendar for April-September on Mar. 26. The Reserve Bank of India last week said it will inject rupee liquidity for the longer duration through dollar-rupee buy/sell swap. The swap auction of $5 billion for tenor of three years will be held on Mar. 26. Some traders expect the central bank to resume from next month the so-called open market operations where the RBI buys federal government bonds. The RBI has purchased bonds worth 2.99 trillion rupees so far this financial year. It has not announced any calendar for future OMOs. Crude oil prices stayed elevated amid supply concerns. The benchmark Brent crude oil contract was up 0.15% at $67.64 per barrel, after ending 0.6% higher in the previous session. Meanwhile, the Federal Reserve's two-day policy meeting starts today. The U.S. central bank is expected to leave interest rates unchanged and the dot plots may signal that the Fed is likely to raise rates once this year, down from two it had forecast in December. The Indian rupee rose to a fresh over seven-month high of 68.35 to dollar against 68.53 at the previous close.
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