Bond yields traded higher on Wednesday despite ratings agency ICRA said borrowing costs for state governments and union territories are expected to increase in the second half of Financial Year 2023-24 (FY24) on rising bond yields and widening of spreads up to 15 basis points.
In the global market, Treasury yields surged on Tuesday after U.S. retail sales last month rose more than expected and lifted the two- and five-year notes to 17- and 16-year highs, as investors bet the Federal Reserve will keep interest rates higher for longer. Furthermore, oil prices edged higher on Tuesday as investors wait to see if U.S. diplomatic efforts and a trip by President Joe Biden to Israel will prevent the conflict in the Middle East from widening.
Back home, the yields on new 10 year Government Stock were trading 2 basis points higher at 7.34% from its previous close of 7.32% on Tuesday.
The benchmark five-year interest rates were trading 1 basis point higher at 7.34% from its previous close of 7.33% on Tuesday.
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