Home >market >stock-market-news >India 2030 bonds reverse losses as government meets auction goal

Mumbai: The Indian government met its target at Friday’s bond sale, allaying concern that demand for sovereign debt is weakening after primary dealers stepped in to rescue the last two auctions.

The yield on the 7.88% notes due March 2030 dropped three basis points to 7.93% as of 3:31 p.m. in Mumbai, according to prices from the central bank’s trading system. It rose to as high as 7.98% before the auction results. The yield on bonds due May 2025, the current 10-year benchmark, also declined three basis points to 7.73%.

The administration sold 140 billion of securities, including 60 billion of notes due 2030, as sales resumed after a two-week break. Benchmark 10-year yields capped their biggest quarterly advance since 2013 on Thursday as worries India will struggle to meet budget-deficit targets soured investor sentiment. The nation granted global funds access to an additional 165 billion of sovereign and state-government bonds from 1 January, part of a plan to increase foreign-investment limits in phases.

“The bond market drew comfort from the fact that the auction went through smoothly," said Ajay Manglunia, Mumbai- based head of fixed income at Edelweiss Financial Services Ltd. “Investors are also relieved that some part of the debt supply will get absorbed as new foreign-investment limits take effect, easing the pressure on bonds."

The government raised 150 billion at the previous auction on 11 December with the help of primary dealers, who bought the unsold debt as demand faltered.

The rupee fell 0.1% on Friday to 66.22 a dollar, prices from local banks compiled by Bloomberg show. The currency weakened 4.7% last year in its fifth straight annual decline, the longest stretch since 2001. Bloomberg

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