Stellar Bond Auction Sends India Yields to Lowest Since 2009
The portrait of Mahatma Gandhi is displayed on Indian rupee banknotes in an arranged photograph in Bangkok, Thailand. (Photographer: Brent Lewin/Bloomberg)

Stellar Bond Auction Sends India Yields to Lowest Since 2009

(Bloomberg) -- India’s sovereign bonds rallied after the government sold a new 10-year note at a yield lower than market expectations.

The yield on the existing 10-year benchmark securities fell by as much as seven basis points to 5.96% following the debt auction results, their lowest since 2009. The new 10-year bond, which will eventually replace the current benchmark, was sold at 5.79% versus 5.83% forecast in a Bloomberg News survey.

Stellar Bond Auction Sends India Yields to Lowest Since 2009

“We are now seeing a fresh round of buying in the longer end after the rally in the shorter segment ran out of juice,” said Anoop Verma, bond trader at DCB Bank Ltd. “The cutoffs have come in quite good and that’s also helping the rally.”

The nation’s sovereign bonds have been supported by debt purchases by the central bank from the secondary market as the government embarked on a record borrowing program in the fiscal year that started April 1.

The government sold 230 billion rupees ($3 billion) of bonds at Friday’s auction, compared with plan to sell 190 billion rupees of notes, the RBI said in a statement.

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