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Indian 10 year yield eases on global risk aversion !

Discussion in 'World Economy' started by satz, Aug 30, 2011.

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  1. satz

    satz Captain SENIOR MEMBER

    Jul 17, 2011
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    Indian 10 year yield eases on global risk aversion

    MUMBAI: Indian federal bond yields eased a tad on Tuesday, retreating from a two-week high hit earlier, as global risk-off sentiment returned, outweighing worries over a possible rate hike next month after June-quarter GDP data slightly exceeded forecast.

    The 10-year benchmark bond yield closed down 1 basis point (bp) at 8.32 per cent, after rising as much as 8.35 per cent, its highest since Aug. 16. It traded in a 8.30-8.35 per cent range during the day.

    Total volumes on the central bank's electronic trading platform were a heavy 132.10 billion rupees ($2.9 billion) in the holiday-shortened week, compared with 90 billion-100 billion rupees normally traded in a day.

    India's financial markets will remain closed on Wednesday and Thursday for local holidays.

    "The market, which opened firm on expectations of lower GDP print gave up gains post the GDP data, but saw some short covering at close with market closed for two days and traders not wanting to run overnight risk," said Arun Kumar R., vice-president of India credit at Nomura Services India.

    "Lower global equities, post weak data from Europe, added to the fall in yields."

    The marginally higher-than-expected June-quarter GDP number diminished hopes of a rate pause at the central bank review on Sept. 16, prompting some sell-off.

    India's economy grew at its weakest pace in six quarters but outperformed even gloomier predictions, reinforcing expectations the central bank will keep raising interest rates to put a lid on inflation.

    Gross domestic product growth in Asia's third-largest economy slipped to 7.7 per cent in the three months through June, slightly exceeding the median forecast in a Reuters poll for an annual rise of 7.6 per cent.

    Ref:-Indian 10 year yield eases on global risk aversion - The Economic Times
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