India bonds under pressure before debt supply; hot inflation prints pinch further
MUMBAI: Indian government bonds came under heavy selling pressure in early trades on Friday ahead of fresh supply of the benchmark paper, while inflation in India crossing the central bank’s target and elevated US inflation clouded the interest-rate outlook. The benchmark 6.94% 2036 bond yield was 7.3113% as of 10:00 a.m. IST, up from 7.2467% on Thursday. The yield has risen by more than 16 basis…
Indian government bonds are facing heavy selling pressure ahead of fresh supply, as inflation in the country surpasses the central bank's target and heightened US inflation adds to concerns over interest-rate outlook. The benchmark 6.94% 2036 bond yield has risen by more than 16 basis points over the last three sessions, with the yield at 7.3113% as of 10:00 a.m. IST.
New Delhi plans to sell 340 billion rupees of the benchmark 2036 paper later in the day, taking its outstanding issuance to 2.72 trillion rupees, the highest for any security ever. The rising US yields and geopolitical tensions have further added to the cautious sentiment among investors. India's inflation data, which shows annual retail inflation accelerating to 6.09% in October, supports expectations of another rate hike by the Reserve Bank of India in early December.
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