Mumbai: Bond yields rose to more three month highs in late trade on Friday after results of the government’s Rs120 billion federal debt auction came in much higher than expectations.
At 5:05pm, the yield on the 8.24% bond maturing in 2018 was at 6.67%, off its high of 6.72%, its highest since 5 December 2008 and higher than the previous closing of 6.51%.
The Reserve Bank of India (RBI) said on Friday it had set a cut-off price of Rs96.75 at the auction of the 6.05% federal bonds maturing in 2019 higher than corresponding to a yield of 6.50%.
Dealers said partial devolvement in all the three papers also dented market sentiment.
Dealing rooms also were thinly staffed as many traders were away for a market seminar in the southern city of Kochi and ahead of market holidays on Tuesday and Wednesday.