India Bond Yields Little Changed; 10-Year Note Sale, 2Q GDP Eyed

Wednesday,   25-Nov-2020   02:51 PM (IST)

Indian federal government bond yields were largely unchanged in the afternoon session, as traders awaited July-September economic growth data and also the sale of the new 10-year note, both scheduled for Friday. The benchmark 5.77% 2030 bond changed hands at 99.19 rupees, yielding 5.88% at 1:00 p.m. in Mumbai, against 99.18 rupees, yielding 5.88% yesterday. The Indian rupee was at 73.96 to the dollar against 74.01 yesterday. India’s gross domestic product growth data for the July-September quarter will be released on Nov. 27. Most market participants consider that the worst contraction of the Indian economy -- at 23.9% in April-June -- is over and expect a recovery from here on.  The federal government will issue bonds worth at least 280 billion rupees on Friday, which includes a new 10-year paper worth 80 billion rupees, which will replace the existing benchmark note in the coming sessions. The RBI will auction 91-day, 182-day and 364-day Treasury Bills worth 160 billion rupees today. The RBI has time and again assured the market that it would help absorb the record government borrowing of 13.10 trillion rupees for this fiscal year that ends Mar. 31. The central bank will buy bonds worth 100 billion rupees via a special open market operation tomorrow. It is the third such auction in the last three weeks. Meanwhile, crude oil prices edged higher, with the benchmark Brent contract hovering near its highest level since early March, earlier in the day, as promising coronavirus vaccine results raised hopes of a recovery in fuel demand.  The contract was higher for the fourth straight session and was last up 1% at $48.32 per barrel, hovering near its highest level since Mar. 6. It has risen 9.5% in the last four sessions. India imports nearly 85% of its crude oil requirements.