MUMBAI: Indian government bonds edged lower on Tuesday as investors took profits after debt markets posted their best weekly gain in nearly three months last week, although broader losses were capped as Brent crude prices hovered near 14-month lows.
The Reserve Bank of India said on Thursday it had cut the amount of government bond borrowing by 100 billion rupees ($1.65 billion) during the period from Aug. 18 to Sept. 30.
The news did not have much impact given investors had widely expected the outcome after the RBI recently said it would transfer a cash balance of 526.79 billion rupees to the government.
Broader losses were capped as Brent crude oil prices traded close to 14-month lows amid weak demand and improving supplies.
"The market was in a profit-booking mode after the rally last week. I think the next set of cues for trading lie elsewhere, maybe the tone of the Fed chairwoman this week," said Anoop Verma, senior vice-president, fixed income, at DCB Bank in Mumbai.
The focus this week will shift to the global central bankers' meet at Jackson Hole, Wyoming, for an annual summit starting Thursday as well as the release of minutes from the US Federal Reserve's July policy meeting.
The new 10-year benchmark bond yield, rose by a 1 basis point to end at 8.53 percent.
The debt market reopened on Tuesday after four days of holidays and hence the volumes were low and trade sluggish.
Traders also cited little impact from Prime Minister Narendra Modi's Independence Day speech on Friday. The recently-elected leader vowed to fire up the bureaucracy to deliver results, but did not announce any sweeping market reforms.
In the overnight indexed swap market, the benchmark 5-year swap rate closed up 1 bp at 8.04 percent. The one-year rate ended unchanged at 8.45 percent.
Comments
Comments are closed.