Bond yields edged lower on Thursday, as ICRA has warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 percent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. It also sharply revised downwards the growth contraction in Q1 to 25 percent as against the previous forecast of 16-20 percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously, which implies a recession.
In the global market, U.S. Treasury yields slipped on Wednesday after a somewhat underwhelming debut of the first 20-year bond in decades left the market uncertain how the new government financing tool will fit in. Furthermore, oil prices edged higher after data showed U.S. crude inventories fell again, easing concern about a supply glut, though lingering fears over the global economic fallout from the COVID-19 pandemic capped gains.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.03% from its previous close of 6.04% on Wednesday.
The benchmark five-year interest rates were trading 2 basis points lower at 5.52% from its previous close of 5.54% on Wednesday.