Government bonds gained in the morning session on optimism that the RBI may ease its stance tomorrow. The benchmark 7.17% bond maturing in 2028 changed hands at Rs 97.27, yielding 7.60%, at 10:00 am in Mumbai against a 7.61% yield yesterday
The rupee slipped to a seven-week low against the dollar in early trade, after U.S. employers added more jobs in January than expected and manufacturing activity in the worlds largest economy rebounded, boosting greenback demand. The rupee changed hands at 71.72 to a dollar its lowest since Dec. 17, against 71.24 at previous close.
Government bonds fell in morning trade, with the benchmark 2028 note slipping to a near two-month low, as sentiment stayed weak after New Delhi announced higher market borrowing for the current and the next financial years.
ANZ conservatively estimates that the country's full year fiscal deficit will overshoot target of 3.3% of the gross domestic product by 20 basis points, marking a second consecutive year of fiscal slippage.
The govt may expand the scope of some current state-funded welfare schemes to cover a wider section of the population when it announces the interim budget next month. An official said schemes like Sarva Shiksha Abhiyan & NHM are wide in scope and new programmes can be launched under them.
The government announced yesterday about the issue of Rs 40 billion of a new bond that will mature in 2029, and traders had not expected this move. Traders said the 10-year federal government bond coupon is seen in 7.35%-7.40% band against 7.52% yield on current 10-year benchmark note.