The Indian government bonds strengthened on Tuesday as investors were cautious amid expectation that major global central banks would provide monetary stimulus to offset the impact on growth from Britain’s decision to leave the European Union.
Also, as a revival in monsoon rains eased concerns that food inflation is set to bounce in a nation that has suffered two consecutive years of drought, rising possibilities for further monetary easing from the Reserve Bank of India (RBI).
The yield on the benchmark 10-year bonds, which moves inversely to its price fell more than 1 basis points to 7.415 percent, yield on short-long 3-year bonds also dipped more than 1 basis point to 7.091 percent by 07:20 GMT.
The India Meteorological Department (IMD) in its latest report narrowed monsoon deficit to 6 percent from 25 percent two weeks ago. The surge in showers during the first three days of the month resulted in lowering of this deficiency. Last Saturday and Sunday happened to be the two wettest days of the year so far.
According to recent press on Bombay Stock Exchange (BSE), India will auction 81.14 billion rupees of limits for foreign investment in government bonds today. The federal government will auction four bonds worth 150 billion rupees on July 8, it said last night. The papers at the auction include 7.80 percent 2021, 7.59 percent 2029, 7.73 percent 2034 and 8.13 percent 2045 bonds.
Lastly, India’s Nikkei composite PMI rose to 51.1 in June, as compared to 50.9 in May.
Meanwhile, the Sensex fell 0.35 percent or 94.65 points to 27,184.11 and Nifty-50 futures trading lower 0.21 percent or 23 points at 8,365.75 by 07:30 GMT.
