Indian Bonds Gain as Yields Near Four-Week High Lure Investors

Indian bonds rose on speculation yields near the highest level in four weeks will attract buyers.

Yields advanced earlier before the government’s scheduled auction of 120 billion rupees ($2.3 billion) of notes on Feb. 8 and a further 240 billion rupees later this month. The sales are part of the government’s record 5.7 trillion rupees borrowing program for the fiscal year ending March.

“Bonds have gained as investors are probably seeing value at current levels,” said N.S. Venkatesh, Mumbai-based head of treasury at state-run IDBI Bank Ltd. “It will remain in a range and investors will watch upcoming data for cues.”

The yield on the 8.15 percent bonds due June 2022 fell two basis points, or 0.02 percentage point, to 7.91 percent in Mumbai, after touching 7.93 percent earlier, according to the central bank’s trading system. The rate touched 7.94 percent on Feb. 4, the highest level since Jan. 3.

India’s economy probably rose 5.5 percent this fiscal year, compared with 6.2 percent last year, according to a Bloomberg survey of economists before the data is published tomorrow.

The one-year interest-rate swap, a derivative contract used to guard against fluctuations in funding costs, was little changed at 7.65 percent, according to data compiled by Bloomberg.

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