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Mumbai, Sept. 14

Bond prices rallied due to positive sentiments, initially as a reaction to the lower-than-expected market borrowing and then on rumours that the held-to-maturity limit for banks may be increased, said bond dealers. The market was expecting that RBI would announce an auction of more than Rs 11,000 crore to make up for the earlier cancelled auction, said a bond dealer with a private bank. The price on the benchmark paper increased by Re 1 from the previous close. Statements by the RBI that it was concerned with the rising bond yields also boosted market sentiments, the dealer added. The total traded volumes increased to Rs 18,260 crore (Rs 11,045 crore). “As traders are returning to the market, the volumes have been increasing,” the dealer said. The 6.90 per cent -10 year-2019 paper opened at Rs 96.8 (7.36 per cent YTM) and closed at Rs 97.82 (7.21 per cent YTM), against Friday’s close of Rs 96.8 (7.36 per cent YTM). The second most actively traded paper 6.35 per cent – 11 year-2020 paper opened at Rs 90.3 (7.73 per cent YTM) and closed at Rs 90.8 (7.65 per cent YTM).

— Our Bureau

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