India Bond Yields Up, Benchmark Steady; GSAP Result Eyed
Thursday,
17-Jun-2021
02:03 PM (IST)
Indian federal government bond yields were higher in the afternoon session tracking a rise in U.S. Treasury yields, but the benchmark note was little changed as traders awaited the outcome of the central bank’s debt purchase today. The benchmark 5.85% bond maturing in 2030 changed hands at 98.64 rupees, yielding 6.04% at 1:00 p.m. in Mumbai, against 98.61 rupees and 6.05% yesterday. Yields on other bonds rose by as much as three basis points. The Indian rupee was at 73.80 to the dollar, against 73.32 yesterday. U.S. yields rose yesterday after the Fed’s dot plot indicated that officials now expect quicker interest rate hikes as compared with forecasts in May. The Fed also raised headline inflation estimate to 3.4% for the year, but maintained its pace of buying $120 billion of bonds every month. On back of the hawkish rate projections, the 10-year U.S. yield climbed seven basis points. Meanwhile, India's central bank is buying federal bonds worth up to 300 billion rupees under its quantitative easing plan today. The auction includes state securities worth up to 100 billion rupees. Bond yields have been gaining since the past two days as a rise in domestic inflation to 6.3% and higher crude oil prices weighed on investor sentiment. India is expected to get included in the global bond indices by December as New Delhi is sorting out tax issues with indices’ operators, the principal economic adviser to the federal finance ministry said today. The benchmark Brent crude oil contract was down 0.81% at $73.79 per barrel, after climbing by about 3% in the last five sessions. India imports nearly 85% of its crude oil requirements.
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