Indian federal bond yields rose on Friday after a volatile trading session, as positive sentiment due to comments from a central bank official and partial rejection of bids at a debt sale were offset by concerns of additional short-term borrowing.
India raised only 90 billion rupees ($1.8 billion) via sale of bonds earlier in the day, against a target of 130 billion rupees, the Reserve Bank of India said in a statement.
"The central bank chose to reject all bids at the 2017 bond sale rather than offer higher yields, which was positive for the market," a senior dealer with a foreign bank said. The new 10-year bond yield closed at 8.94 percent, up 4 basis points from Wednesday's close. It moved in a wide 8.90 to 9.00 percent band during the day. The market was closed on Thursday for a local holiday.
The 7.80 percent 2021 bond fell 1 basis point to 9.05 percent. Total volumes on the central bank's electronic trading platform were higher at 120.85 billion rupees ($2.4 billion) compared to the daily average of 90-100 billion rupees.