Indian sovereign bonds fell as a drop in yields to a two-week low deterred investors from buying ahead of Friday’s auction.
The yield on notes due May 2025 rose two basis points, the most since Dec. 21, to 7.74 percent in Mumbai, according to prices from the Reserve Bank of India’s trading system. Its close of 7.72 percent on Monday was the lowest since Dec. 17. The government plans to sell 140 billion rupees ($2.1 billion) of securities on Jan. 8, including 80 billion rupees of new 10-year debt, the central bank said in a statement after the close of markets on Monday.
“We are seeing traders using any price gains to book profits given that the market is pretty range bound,” said Badrish Kulhalli, a fixed-income fund manager at HDFC Standard Life Insurance Co. in Mumbai. “Investors are now eyeing the budget,” typically at the end of February, for further clues, he said.
The rupee ended little changed at 66.5975 a dollar in Mumbai, prices from local banks compiled by Bloomberg show. It slumped 0.7 percent on Monday in the biggest decline since Nov. 9 on speculation demand for riskier assets will be hurt as tensions in the Middle East intensify and poor Chinese economic data adds to concern over global growth.