Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

India 10-Year Bonds Gain as Yields at Two-Year High Lure Buyers

Oct. 19 (Bloomberg) -- India’s 10-year bonds gained for the first time in four days on speculation yields at the highest level in two years will attract investors.

Yields have risen 49 basis points since Jan. 1 amid concern the central bank will increase interest rates for the sixth time this year at its policy review on Nov. 2 to cool inflation. The wholesale price index rose 8.6 percent in September from a year earlier after gaining 8.5 percent in August.

“There was some softening of bond yields today as these are probably good levels to buy,” said Roy Paul, deputy general manager at Federal Bank Ltd. in Mumbai.

The yield on the 7.80 percent note due May 2020 fell one basis point to 8.08 percent as of the 5 p.m. close in Mumbai, according to the central bank’s trading system. The yield earlier touched 8.13 percent, the highest level since October 2008. The price rose 0.11, or 11 paise per 100 rupee face amount, to 98.18.

Inflation still remains “well above” the central bank’s “comfort zone,” Deputy Governor Subir Gokarn said Oct. 5 in Mumbai, prompting speculation of more monetary tightening.

The cost of one-year interest-rate swaps, a fixed payment made to receive floating rates, rose one basis point to 6.73 percent.

To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.