India's 10-year bond yield at over 13-month high as inflation disappoints
India`s benchmark 10-year bond yield rose to its highest in over 13 months as higher-than-expected October inflation dashed rate cut expectations.
The 10-year bond yield went up as high as 7.01 percent, the highest since Sept. 29, 2016, after October inflation rose to 3.58 percent as food and fuel prices accelerated. The paper had closed at 6.97 percent on Monday.
Traders expect yields to rise further as state-run banks, the usual buyers in the secondary market, sit on heavy losses.
"We keep saying that state-run banks will come and buy, but are they mad, can`t they see the realities that those days of bond rally are over now?" said a trader.
"They can`t keep adding to speculative risks because even for that they need capital to provide for the mark-to-market losses."
The 10-year paper has risen by 50 basis points since the start of July as concerns over global rate tightening and upside risks to inflation back home surfaced.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.