Indian long-term bonds gain on hopes govt will raise short-term loans

Indian long-term government bonds gained on Friday after finance ministry said that government is aiming to issue more short-term bonds with maturities between 5-9 years as part of annual borrowing plan. The yield on the 30-year bonds, which moves inversely to its price fell 1bp to 7.858 pct by 0725 GMT.

The Indian government is aiming to issue more short-term bonds with maturities ranging between 5 and 9 years as part of its annual borrowing plan as New Delhi seeks to cut long-term liabilities, noted NewsRise on Reuters.

“The finance ministry is in talks with the Reserve Bank of India to raise the share of short-term papers in weekly government bond auction,” the official, who didn’t wish to be identified, told NewsRise on Reuters.

On the other hand, the Indian bonds have been closely following developments in oil markets because of their impact on inflation expectations, as India imports 80 pct of its crude oil requirements. Meanwhile, the International benchmark Brent futures rose 0.55 pct to $49.09 and West Texas Intermediate (WTI) climbed 0.60 pct to $48.45 by 0725 GMT. The Sensex rose 0.29 pct or 73.96 points to 25,473.68 and Nifty-50 futures jumped 0.53 pct or 40.85 points to 7,819 by 0725 GMT.