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%
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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