Indian bonds continue to fall on profit booking; GST bill in focus

The Indian government bonds continued to trade lower on Wednesday as investors cashed in profits after relishing a long week rally. Also, investors awaited the goods and services tax (GST) bill, which is to be presented in the parliament later today.

The yield on the benchmark 10-year bonds, which moves inversely to its price, rose 1-½ basis points to 7.190 percent, the yield on super-long 30-year bond also jumped 3-1/2 basis points to 7.411 percent and the short-term 3-year note yield up 1-1/2 basis points to 6.931 percent by 07:10 GMT.

According to Reuters, Indian parliament’s upper house is likely to discuss on August 3 a constitutional amendment bill for the long-pending Goods and Services Tax. Last week, the federal cabinet approved some key revisions to the constitutional amendment bill to help secure broader political support for the long-stalled tax legislation. The GST legislation is currently pending approval of the parliament’s upper house, where the ruling Bharatiya Janata Party lacks a majority.

Moreover, markets also await the announcement of the new RBI chief, which is anticipated to happen in the ongoing monsoon session of the Parliament.

Lastly, investors will remain keen to focus on next week’s monetary policy decision, the last one by the Reserve Bank of India Governor Raghuram Rajan.

Meanwhile, the Sensex fell 0.90 percent or 251.35 points to 27,730.36 and Nifty-50 futures trading 0.80 percent lower or 67 points at 8,598 by 07:40 GMT.