Indian 10-year bond yields hit all time low on Donald Trump's shocking victory

Indian government bonds gained Wednesday after the United States Republican candidate Donald Trump pinned his victory against Democrat opponent Hillary Clinton in the 2016 presidential election.

The yield on the benchmark 10-year bonds, which moves inversely to its price, fell 12 basis points to 6.677 percent (all time low), the yield on long-term 30-year note dipped 9 basis points to 7.175 percent and the yield on short-term 3-year note slid 11 basis points to 6.453 percent by 07:00 GMT.

Following this news, the global bonds prices surged as investors sought safe-haven assets. The U.S 10-year bond yield fell 6 basis points to 1.80 percent, the Australian 10-year Treasury note yield dipped 10-1/2 basis points to 2.256 percent, the German 10-year yield slid 9 basis points to 0.097 percent and the Japanese 10-year note yield inched 2 basis points lower to -0.08 percent.

Market is in panic as Trump's anti-trade stance would jeopardise trade with China and other emerging market economies. His anti-immigration policies could also create labour shortages in the U.S. economy. Business confidence would take a hit and new downside risks to the economy are likely to reduce the probability of a December rate hike by the Federal Reserve.

Trump’s victory is the latest political shock to financial markets, following the U.K.’s June vote to leave the European Union. Also, Trump, who compared his candidacy to the Brexit vote, has criticized Yellen, saying she kept rates too low during Obama’s tenure, and suggested that if he won he’d probably nominate someone else to lead once her term expires in 2018, reported Bloomberg.

Meanwhile, the Sensex fell 1.27 percent or 350.28 points to 27,240.86 and Nifty-50 futures traded 1.12 percent lower or 96.70 points at 8,465 by 07:30 GMT.