We could probably continue to trade weak in bonds for quite some time: Neeraj Gambhir

In an interview with CNBC-TV18, Neeraj Gambhir, MD and Head of Fixed Income at Nomura India gave his outlook on the road ahead for the bond market.

We have had an uptick in the inflation, we have also had the crude oil prices jumping quite significantly, global interest rate cycle turning around, US Treasuries going up quite significantly, so these are all factors which have contributed to a substantial uptick in the bond yields, he said.

Yesterday’s Budget announcements have done quite significantly increased the expectations of the market that there could be potentially an interest rate hike around the corner, if not hike a possibility of change in the Reserve Bank of India’s (RBI) stance and much more hawkish monetary policy stance going forward, he added.

I don’t think that in the near-term there is any respite, so we could probably continue to trade weak in bonds for quite some time, said Gambhir.

We are currently in a very negative market sentiment and till such time we see a turnaround in one of these headwinds or there is some change in the factors which are driving the bond yields, it is unlikely that the market is going to turn around and starts looking at some kind of a bottom fishing, he further mentioned.

It is difficult to see when we will turnaround from this scenario, he said.

For full interview, watch accompanying video...