Bond yields trade lower on Thursday

Bond yields edged lower on Thursday as domestic investors rushed to buy sovereign securities on expectations of further rate cuts and higher demand for bonds. The government’s latest move to curb Rs 500 and Rs 1,000 currency notes augurs well for bond market, as the bank will garner more funds through deposits, which in turn could generate fresh investment in bonds.  

In the global market, U.S. 30-year Treasury bond yields on Wednesday posted their sharpest rise in more than five years, bolstered by expectations U.S. President-elect Donald Trump will enforce protectionist trade policies and increase fiscal spending that will boost inflation. Furthermore, Oil prices dipped pulled down by rising U.S. crude inventories and as markets tried to interpret U.S. President-elect Donald Trump's surprise victory.

Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 6.64% from its previous close of 6.67% on Wednesday. 

The benchmark five-year interest rates were trading 8 basis points lower at 6.52% from its previous close of 6.60% on Wednesday.