MUMBAI: Indian government bond yields were flat in early deals on Monday, as traders held pat awaiting fresh triggers, with focus on US Treasury peers and the local central bank’s liquidity management for further moves.
The yield on the benchmark 10-year bond was at 6.3148% as of 10:40 a.m. IST, compared with its previous close of 6.3134%.
The 10-year US Treasury yield was also steady at 4.2847% in Asian hours, after closing at 4.2830% in the previous session. Traders said they are holding back from taking positions after a disappointing debt auction on Friday triggered a selloff.
“We will closely watch the US Treasury yields and RBI’s (Reserve Bank of India’s) liquidity moves to gauge further direction; till then the volumes should remain muted,” a trader at a private bank said.
“We may see some rally in prices in the second-half if there is demand from banks for quarter-end purchases.”
Indian bond yields inch up ahead of large debt supply
Market participants will also focus on demand for state debt this week, after a lower-than-expected borrowing plan by states for July-September.
Indian states are aiming to raise 2.87 trillion rupees ($33.6 billion) via bonds in July-September, compared to market expectations of borrowings of around 3 trillion rupees.
Meanwhile, foreign investors stepped up purchases of Indian government bonds last week, and posted their biggest buying in three months.
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