loader

India's 10-Year Bond Yield Hits Over2-Year Low Amid Robust Domestic Demand

30 July, 2024

Summary:

On Tuesday, Indian government bond yields fell, propelled by strong demand from domestic banks. The 10-year benchmark yield hit its lowest level in two years, reflecting the impact of the Reserve Bank of India's recent liquidity guidelines for lenders. Market participants are also closely watching for the Federal Reserve's upcoming policy decision, which could further influence market trends.

India 10 Year Bond Yield Hits Over2 Year Low Amid Robust Domestic Demand

In early trading on Tuesday, Indian government bond yields pulled back as domestic banks continued to show strong demand. The benchmark 10-year bond yield reached its lowest point in over two years.

As of 10:00 a.m. IST, the benchmark yield stood at 6.9145%, down from the previous close of 6.9184%. Earlier in the session, it dipped to 6.9088%, marking its lowest level since April 7, 2022.

"A sustained demand from local banks is evident, and we might test the 6.90% level today. However, any further movement will likely depend on the Federal Reserve's policy decision," remarked a trader from a state-run bank.

Demand from local banks has risen following the Reserve Bank of India's release of draft guidelines aimed at enhancing the liquidity resilience of lenders. If implemented, these guidelines could boost demand for government securities.

US Treasury yields softened on Friday and fell further during Asian trading hours on Monday, following data that showed only a modest increase in US prices for June. This eased concerns about a larger-than-expected rise in inflation.

The Personal Consumption Expenditures (PCE) price index edged up by 0.1% last month, compared to no change in May. Meanwhile, the core PCE price index increased by 0.2% in June, following an unchanged 0.1% rise in May.

Investors will closely monitor Chair Jerome Powell's remarks, as any dovish signals could strengthen expectations for a 75 basis point rate cut in 2024. According to the CME FedWatch tool, the market has priced in 66 basis points of rate cuts by the end of this year.

Supporting market sentiment, oil prices continued their decline from Monday, with benchmark Brent crude futures falling below $80 per barrel for the first time in seven weeks. This drop is driven by concerns over weaker Chinese demand.

About RR Finance

An integrated financial services group, offering a wide range of financial products and services to corporates, institutions, high-net worth individuals and retail investors.

Explore a wide range of investment opportunities with RR Finance :

https://www.rrfinance.com/

Disclaimer: The recommendations, suggestions, views, and opinions expressed by experts are their own and do not reflect the views of RR Finance. This blog is for information purpose only, not an investment advice.

Popular posts from this blog
Ola Electric Mobility announces IPO price band
Ola Electric Mobility announces IPO price band

The IPO consists of a fresh issue worth Rs 5500 crore and an offer for sale of up to 84.94 million shares. At the upper price band, the offer for sale amounts to Rs 645.96 crore, bringing the total issue size to Rs 6145.96 crore.

Rupee Hits Record Low Amid Outflows and Weak Risk Appetite
Rupee Hits Record Low Amid Outflows and Wea Risk Appetite

On Friday, the Indian rupee hit a historic low of 83.7250 against the U.S. dollar. This decline was fueled by a weak risk appetite, increased dollar demand from oil companies, and outflows from domestic equities. Additionally, the volatility of the Chinese yuan exacerbated the situation, raising concerns over carry trades between the two currencies...

SMC Global Securities Announces NCD Issue for 2024: Key Details and Investment Insights
SMC Global Securities Announces NCD Issue for 2024

SMC Global Securities Limited has announced the opening of its Non-Convertible Debentures (NCD) issue for 2024. The issue opens on July 19, 2024, and will remain open until August 1, 2024. This offering provides investors with an opportunity to invest in secured, redeemable NCDs, rated as 'A/Stable' by both CRISIL and ICRA.

RR Investors Capital Services Pvt. Ltd AMFI-registered Mutual Fund Distributor

ARN-0032 Validity 14-Mar-2027

Head Office - 4th floor, Indraprakash Building 21, Barakhamba Road, New Delhi – 110001

callLandline Number
+91 11-4444-1111

Customer Care
+91 9350316010

Security
  • SSL
Follow Us

SEBI Registration No: NSE Cash: INB231219636 | SEBI Registration No: NSE Derivative: INF231219636 | SEBI Registration No: BSE Cash: INB011219632 | SEBI Registration No: MCX-SX: INE261219636 | SEBI Registration No: NSE Currency: INE231219636 | SEBI Registration No: USE: INE271219631 | SEBI Registration No: CDSL: IN-DP-CDSL-3242005 | NCDEX Membership No: 00635 | MCX Membership No: 28850 | NSEL Membership No: 10650 | RBI Registration No: NBFC: N-14.03215 | IRDA Registration Number : CB-066/03 | AMFI Registration No : ARN -0032| SEBI Registration No: Merchant Banker: INM000007508


* Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.


© 2022 RR Investors Capital Services Pvt. Ltd | All Rights Reserved.