Bond yields edged lower on Wednesday, despite International Monetary Fund (IMF) cut India’s FY20 growth forecast by 30 bps to 7%, owing to weaker-than-expected outlook for domestic demand. Similarly, the FY21 forecast has been slashed by 30 bps to 7.2%.
In the global market, US Treasuries yields rose on Tuesday on a report that US negotiators are heading to China to discuss trade terms, boosting hopes that the two countries may deescalate a trade war that has weighed on economic growth. Furthermore, Oil prices rose, extending gains after an industry group reported a much bigger than expected drop in US inventories, while the US Navy said it may have downed a second Iranian drone last week.
Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 6.43% from its previous close of 6.46% on Tuesday.
The benchmark five-year interest rates were trading 2 basis points lower at 6.41% from its previous close of 6.43% on Tuesday.