MPC is likely to maintain the status quo on interest rates in its October review, a Moneycontrol poll of 15 economists, bank treasury heads and fund managers has found.
On August 14, S&P Global Ratings has upgraded India’s long-term unsolicited sovereign credit rating to ‘BBB’ from ‘BBB-’, while also raising the short-term rating to ‘A-2’ from ‘A-3’.
The potential inversion of India-US yields could be more than a statistical anomaly - it may signal the beginning of a long-term shift in global economic leadership.
The 10-year benchmark bond yield opened at 6.37 percent against the previous close of 6.35 percent
The 10-year bond yield was at 6.7742% as of 10:10 a.m. IST on Wednesday, compared with its previous close of 6.7597%.
A Bloomberg index of hard currency emerging-market sovereign bonds has been flat this week, but Friday’s payrolls report could inject fresh momentum into dollar-denominated debt.
Going ahead, experts believe that tensions in the Middle East could pose a bump to the bond rally.
A rate cut may weaken the dollar, prompting investors to explore alternative assets, including the Indian rupee. Foreign investors may get drawn to Indian equities, potentially leading to increased capital inflows
According to Rohit Srivastava, the trend for bond yields in India is downward. When the market senses declining yields and interest rates, it becomes a strong positive.
Data shows that issuances in August were the lowest since October 2022, when companies and banks raised Rs 46,000 crore through corporate bonds.
The company plans to utilise the proceeds from these bonds to partly meet debt requirements of ongoing and under construction projects, including recoupment of expenditure already incurred, and to refinance the existing loans, according to the issuer manual of the company.
Spreads have narrowed further as the market's terminal rate expectations might have changed with the RBI keeping the policy rate unchanged and inflation easing, say fund managers
Since the RBI’s April monetary policy, yields on papers rated AA and below have fallen 18-34 bps across maturities.
According to RBI data, the total number of registrations stood at 99,548 as on May 8, 2023, compared to 69,536 on October 10, 2022.
The difference between benchmark US and Indian securities narrowed to 3.53 percent on May 8 from 3.96 percent on April 6.
The yield on the benchmark 7.26 percent 2033 bond fell to 7.0338% on May 8 from 7.3056% on April 3.
The 10-year benchmark 7.26 percent 2033 bond yield was trading at 7.0199 percent during afternoon trade, as compared to 7.09 percent close on the previous trading session.
The cut-off yield on the 10-year SDL eased by 13 basis points (Bps) on-week while the 7-year SDL fell by 8-9 bps on weekly basis. One basis point is one hundredth of the percentage point.
The 10-year benchmark bond opened trading at a yield of 7.3211 percent against the previous day’s close of 7.35 percent.
The yield on the 10-year benchmark bond eased to 7.3579 percent from 7.4321 percent in the previous trading session
10-year benchmark bond 7.26 percent 2032 yield touched 7.4384 percent during afternoon trade and then eased to 7.4298 percent.
In the last four weeks, the weighted average yield on the 10-year state development loans has risen by 5-7 basis points.
There are enough levers for bank credit growth to remain robust, but companies may take a relook at corporate bonds for fund-raising as bank loans begin to look expensive with rates hikes, says the group head of treasury and markets
Monetary Policy Committee members divided over rate hikes have reduced fears of a huge rate hike by RBI, dealers say. Expect the spread between the repo rate and benchmark bond to narrow to 100-120 bps from 160 bps now.
Recent history calls attention to the spread between bond yield and earnings yield. The resistance level seems to be between 18,000 and 18,500