Indian bonds steady, US Treasuries help sentiment

Indian bonds steady, US Treasuries help sentiment

Mumbai: Indian federal bonds were steady on Tuesday, 20 November, with investors on the sidelines as cash conditions were tight but traders said lower US Treasury yields helped sentiment.

At 9:25am (0355 GMT), the 10-year federal bond was at 7.87%, unchanged from the previous close.

Fund availability in the banking system shrunk earlier this month after higher reserve requirement for banks drained Rs160 billion ($4.1 billion). The RBI has injected cash into the system via its repo window since last week to shore up liquidity. Overnight cash rates traded at 7.70-7.75%, compared with 6% when cash is comfortable.

“US yields were a comforting factor. Otherwise, we could have seen selling in bonds today," a trader with a US investment bank said.

An overnight rally in Treasuries pushed US bond yields to lows not seen in nearly three years as falling stocks compelled investors to take refuge in safer government debt.