Bond yields, after edging to nearly two months low, steadied on Friday as the impact of government's raising diesel prices, which sparked hopes that the Reserve Bank of India lowering interest rates as early as next week, was counterbalanced with shockingly higher August WPI data.
India's main inflation gauge, shockingly rising at 7.55% for the month of August, as compared to 6.87% (Provisional) for the previous month and 9.78% during the corresponding month of the previous year, confirmed the case of world’s most aggressive central bank’s prolonging anti-inflationary stance during its next mid-quarterly policy review on September 17, 2012.
On the global front, US 10-year Treasuries fell slightly in Asian trade on Friday, as investors shed safe-haven assets following the US Federal Reserve's decision in the previous session to take bold new easing measures. Meanwhile, Brent crude, climbing above $116 a barrel, rose for the seventh straight session on Friday, on hopes for stronger global demand for oil after the US Federal Reserve launched an aggressive programme to stimulate the economy.
The yields on 10-year benchmark 8.79% - 2021 were trading flat at its previous close of 8.17%.
The benchmark five-year interest rates edged 1 basis point lower at 7.18% from its previous close of 7.19% on Thursday.
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