Bond yields traded higher on Friday despite private report stating that lockdowns in April and May to contain Covid-19 have likely led to India’s economy contracting 12 per cent in the June quarter as against 23.9 per cent contraction in the same quarter in 2020.
In the global market long-dated yields tumbled on Thursday and the yield curve flattened as some investors appeared to have been caught flat-footed by the U.S. Federal Reserve’s comments that it is in no hurry to pare bond purchases and expects to raise rates in 2023. Furthermore, oil prices fell for a second consecutive day as the U.S. dollar soared on the prospect of interest rate hikes in the United States, but were nevertheless on track to finish the week flat - only slightly off multi-year highs.
Back home, the yields on new 10-year Government Stock were trading 1 basis point higher at 6.02% from its previous close of 6.01% on Thursday.
The benchmark five-year interest rates were trading 4 basis points lower at 5.62% from its previous close of 5.66% on Thursday.