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Business News/ Market / Stock-market-news/  India’s 2023 bonds complete biggest weekly gain since January
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India’s 2023 bonds complete biggest weekly gain since January

The yield on 8.83% sovereign bonds due November 2023 slid 13 basis points this week to 8.94%

The bond yield, which fell six basis points Friday, climbed to 9.10% on 7 April, the highest level for benchmark 10-year notes since November. Photo: Pradeep Gaur/MintPremium
The bond yield, which fell six basis points Friday, climbed to 9.10% on 7 April, the highest level for benchmark 10-year notes since November. Photo: Pradeep Gaur/Mint

Mumbai: Indian government bonds due 2023 capped their biggest weekly gain in almost three months as yields near the highest level since November attracted buyers.

Ten-year yields surged 30 basis points in the four trading sessions through 7 April on concern demand for existing notes will suffer due to increased issuance by the government. India auctioned 16,000 crore of debt Friday, the second sale for the fiscal year that began 1 April, after the government sold an equal amount of securities on 4 April. The markets are shut 14 April for a local holiday.

The yield on the 8.83% sovereign bonds due November 2023 slid 13 basis points, or 0.13 percentage point, this week to 8.94% in Mumbai, prices from the central bank’s trading system show. That’s the biggest decline since the five days through 17 January. The rate, which fell six basis points Friday, climbed to 9.10% on 7 April, the highest level for benchmark 10-year notes since November.

“Anything above 9% seems attractive as that level is and has historically been a psychological barrier for the market," said Killol Pandya, Mumbai-based senior fixed-income fund manager at LIC Nomura Mutual Fund Asset Management Co. “So it’s quite natural that you saw bonds gaining this week."

India’s government may borrow 3.68 trillion, or 62% of the full-year issuance plan, in the April-September period, economic affairs secretary Arvind Mayaram said 28 March.

One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, dropped seven basis points this week and two basis points Friday to 8.60%, according to data compiled by Bloomberg. They climbed nine basis points last week. Bloomberg

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Published: 11 Apr 2014, 05:40 PM IST
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