Bond yields fall as RBI cuts auction size by Rs 5,000 cr: Government bond yields fell in early trade after the Reserve Bank of India (RBI) cut the auction size for Friday by Rs 5,000 crore. RBI will auction two bonds instead of four bonds planned earlier in the issuance calendar for marketable dated securities released in March. The auction size is for a notified amount of Rs 10,000 crore. At 9:30am, the yield on the 10-year benchmark government bond 7.16% 2023 was trading at 8.34% compared with previous close of 8.46%. Even yesterday, yields had softened as Gross Domestic Product (GDP) data released on Friday after the close of market hours suggested that growth is slowing down, raising hopes for a rate cut. GDP growth for the first quarter of the current fiscal stood at 4.4% compared with 4.8% recorded in the previous quarter. Besides that manufacturing activity contracted for the first time in August since the peak of the global financial crisis in March 2009, as indicated by the HSBC purchasing managers’ index (PMI) released on Monday. The contraction was more severe this time, shown by a reading of 48.5 on the index as against 49.5 then. Even sequentially, there was a drop following a reading of 50.1 in July. A reading of 50 or above indicates growth and below it contraction. RBI will review the monetary policy later this month.
Posted on: Tue, 03 Sep 2013 05:04:32 +0000
Trending Topics
Recently Viewed Topics
© 2015