×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Bonds reverse losses after concerns on SBI allayed

Bonds reverse losses after concerns on SBI allayed
Comment E-mail Print Share
First Published: Wed, Jun 13 2007. 01 33 AM IST
Updated: Wed, Jun 13 2007. 01 33 AM IST
India’s 10-year bonds reversed the day’s losses as investors judged the rise in yields to a 10-month high was too rapid.
Bonds also gained after finance minister, Palaniappan Chidambaram, said the government is selling additional debt to pay for a stake in State Bank of India, allaying concerns the extra auctions were meant to mop up surplus funds from the banking system. Bonds earlier extended losses for a second day, pushing the benchmark yield up to 8.31%, following the government’s announcement on 8 June of unscheduled auctions.
“The yields were getting attractive at these levels, and we saw buying interest emerge,” said P. Venkatesh, chief bond trader at state-owned Corporation Bank in Mumbai. “The official statement also helped clarify the purpose of the sales, improving sentiment in the market.” The yield on the benchmark 8.07% bond maturing in January 2017 fell 1 basis point, or 0.01 percentage point, to 8.22% at the 6.15pm close of trading in Mumbai, according to the central bank’s trading system. The price of the security rose 0.08, or 8 paise per 100-rupee face amount, to 99. Bond yields move inversely to prices.
The government on Tuesday sold Rs5,000 crore ($1.2 billion) of the 7.49% bond due April 2017 at a cut-off yield of 8.44%, 9 basis points more than?Monday’s?close. BLOOMBERG
Comment E-mail Print Share
First Published: Wed, Jun 13 2007. 01 33 AM IST
More Topics: Money Matters | Bonds |