In­dia's bonds rise on rate-cut ex­pec­ta­tions

The Pak Banker - - BUSINESS -

NEW DELHI: In­dia's 10-year sov­er­eign bonds rose for a third day on spec­u­la­tion lower oil prices and slow­ing in­fla­tion will give the cen­tral bank room to cut bor­row­ing costs fur­ther af­ter China un­ex­pect­edly re­duced in­ter­est rates on Tues­day.

A 57 per­cent drop in Brent crude in the past year has helped curb con­sumer-price gains in the coun­try, which de­pends on im­ports for more than 75 per­cent of its con­sump­tion. Gov­ern­ment bond yields are well priced from a val­u­a­tion per­spec­tive, ac­cord­ing to pri­mary deal­ers SBI DFHI Ltd. The rupee strength­ened on Thurs­day. "Ev­ery­body is now look­ing for a rate cut," said Soumya­jit Niyogi, an in­ter­est-rate strate­gist at SBI DFHI Ltd. in Mum­bai. "In­fla­tion is sub­stan­tially be­low the cen­tral bank's tra­jec­tory and bonds now of­fer a buy­ing op­por­tu­nity." The yield on notes due May 2025 fell three ba­sis points to 7.77 per­cent in Mum­bai, ac­cord­ing to prices from the Re­serve Bank of In­dia's trad­ing sys­tem. It de­clined 12 ba­sis points in the last three ses­sions, af­ter an 11 ba­sis point jump on Mon­day that marked the big­gest in­crease for bench­mark 10-year debt since De­cem­ber.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.