JPMorgan Said to Have Led Record Buying of India Bonds Yesterday

JPMorgan Chase & Co. bought about $2.4 billion of Indian government bonds yesterday, leading record purchases by international banks, according to three fixed-income dealers in Mumbai.

Foreign lenders acquired a net 148 billion rupees ($2.4 billion) of sovereign debt yesterday, the most in Clearing Corp. of India Ltd. data going back to 2006. JPMorgan may have purchased the notes on behalf of institutional clients, the dealers said, asking not to be identified as the information isn’t public. Mollica Senapati, a spokeswoman in Mumbai for the U.S. bank, declined to comment on the matter in an e-mailed response to questions.

Global funds pumped in an unprecedented $13.8 billion into local government and corporate bonds in 2014 as India’s success in reining in inflation and stabilizing the rupee added to optimism the nation’s new government will spur economic growth. JPMorgan’s purchases made up about 90 percent of the $2.76 billion pumped in by overseas money managers yesterday, exchange data show.

“The purchases represent a significant amount for the bond markets,” said Anindya Das Gupta, Mumbai-based treasurer at Barclays Plc. “A stable currency, easing inflation and the fiscal intent of the government are helping to boost the global appetite for Indian bonds.”

The yield on the benchmark 8.4 percent sovereign securities due July 2024 dropped five basis points, or 0.05 percentage point, yesterday to 8.48 percent, the lowest level this month. That’s the biggest decline in a week.

Rupee, Inflation

The rupee has rebounded 13 percent from a record low of

68.845 per dollar reached a year ago, the world’s best-performing currency in the period, according to data compiled by Bloomberg. Consumer-price inflation in India slowed to 7.96 percent in July from as much as 11.2 percent in November.

Finance Minister Arun Jaitley aims to reduce the budget deficit to 4.1 percent of gross domestic product, which would be the least since 2008, in the year through March 2015, according to official estimates released last month.

JPMorgan’s bond purchases were executed across different maturities in the afternoon trading session, the dealers said. All other categories of investors, including public and private banks, mutual funds and primary dealers, were net sellers of the securities yesterday, the Clearing Corp. data show.