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Bond yields extends previous session’s rise; no-bang announcements from FM bothers

13 Jun 2013 Evaluate

Bond yields extended their rise to second trading session on Thursday after Finance Minister Chidambaram abstained from any big-bang moves to attract capital inflows to stem the rupee's fall in his much anticipated press briefing. He said, despite shrinking yield differential with US, India remains one of the most attractive markets. Further, the yields also rose after dealers preferred to remain on the sidelines ahead of May inflation data on June 14, which would provide cues on RBI’s stance in its monetary policy slated next week.

On the global front, US Treasuries held firm in Asian trade on Thursday as Asian shares tanked on worries that the US Federal Reserve is on course to scale back its stimulus. Meanwhile, Brent futures slipped towards $103 a barrel on Thursday as a jump in gasoline stocks in the US with the summer driving season already underway stoked worries about demand, but a weak dollar helped stem the slide.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 5 basis points higher to 7.34% from its previous close of 7.29% on Wednesday.

The benchmark five-year interest rate swaps were trading up 3 basis points higher at 7.06% from its previous close of 7.03% on Wednesday.

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