Summary :
Overseas investors purchased approximately $358 million in bonds on Monday, marking the highest amount in two months and continuing a streak of seven consecutive days of buying, according to data compiled by Bloomberg.
Overseas investors bought about $358 million in bonds on Monday, marking the highest amount in two months and extending a seven-day streak of purchases, according to data compiled by Bloomberg. This brings net purchases for May to $709 million, following $1.9 billion in sales in April due to a global risk-off that prompted outflows from emerging markets.
India has been a focal point for global investors this year, with the upcoming inclusion of the nation’s debt in JPMorgan’s flagship index in June signaling its increasing influence. The US bank estimates inflows could reach as much as $25 billion. Additionally, a reduction in short-term borrowings and a record dividend payout by the central bank have enhanced the attractiveness of local bonds.
Purchases have primarily targeted government bonds, with index-eligible bonds attracting $320 million in inflows this month after experiencing $1.2 billion in outflows in April, according to separate data from the Clearing Corp. of India. The yield on the benchmark 10-year bond has decreased by more than 20 basis points from this quarter’s high in April, settling at 7.02 percent on Wednesday.
“Favorable supply and demand dynamics, proactive liquidity management, moderating inflation, and a stable currency bode well for a sustained decline in yields,” Barclays Plc strategists, including MitulKotecha, wrote in a note.
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