Bond yields edged higher on Wednesday, as some concern came with Global rating agency Fitch’s report that Banks would face a capital shortfall of about $50 billion (about Rs 3.5 lakh crore) in the event of a systemic crisis in the non-banking financial company (NBFC) sector. The stress test examines the potential impact on banks of liquidity pressures in the NBFC sector developing into widespread failures.
In the global market, US Treasury yields dropped on Tuesday, as investors bought safe-haven debt after UK lawmakers voted against Prime Minister Boris Johnson's extremely tight timetable to approve his deal for Britain to exit the European Union. Furthermore, Oil slipped after US industry data showed a bigger-than-expected build in crude stockpiles, but possible deeper production cuts coming from OPEC and its allies prevented a further slide in prices.
Back home, the yields on new 10 year Government Stock were trading 9 basis point higher at 6.79% from its previous close of 6.70% on Tuesday.
The benchmark five-year interest rates were trading 10 basis points higher at 6.44% from its previous close of 6.34% on Tuesday.