Bond yields trade lower on Wednesday

10 Feb 2021 Evaluate

Bond yields traded lower on Wednesday, as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the gross domestic product (GDP) growth is likely to bounce back to 10.4% year on year (yoy) in FY22, primarily driven by the base effect. The impact of COVID-19 pandemic and lockdown on the economy, although subsiding, will continue to delay the normalisation of economic activities in the contact-intensive sectors till the mass vaccination/herd immunity becomes a reality.

In the global market yields, Benchmark U.S. Treasury yields made up earlier declines on Tuesday as investors prepared for the U.S. Treasury Department to sell new long-dated debt, but they held below 11-month highs reached on Monday. Furthermore, oil prices rose again, extending their more than week-long rally after industry data showing a fall in U.S. crude oil stocks added to optimism about an expected rise in global fuel demand.

Back home, the yields on new 10 year Government Stock were trading 6 basis points lower at 6.01% from its previous close of 6.07% on Tuesday.

The benchmark five-year interest rates were trading 2 basis points lower at 5.60% from its previous close of 5.62% on Tuesday.

 

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