Mumbai: Bond yields came off three-month peaks in thin trading on Monday as investors picked up bargains selectively, even as concerns of heavy supplies remained.
Dealers said the higher-than-expected buyback amount prevented a sharp rise in yields but they would still wait and watch for the auction’s outcome on Thursday to take further cues.
At 2:01pm, the yield on the 8.24% bond maturing in 2018 was at 6.76%, off the day’s high of 6.82%, its highest since 4 December. It ended at 6.75% on Friday. The bond market is closed on Tuesday and Wednesday.
The government is scheduled to sell Rs220 billion of debt over the next two weeks, out of which Rs120 billion of debt will be sold on Friday.
The Reserve Bank of India said it would buy back Rs70 billion of bonds on Thursday, with an option to retain an additional Rs35 billion, to provide liquidity and improve appetite for debt.