Benchmark yield closes 60 bps lower at 5.60%, auctions support rally - Edelweiss

An additional borrowing programme announced in the previous week failed to disrupt the optimism of participants as the bond market recovered from previous week's knee-jerk reaction. Positive momentum was seen across the curve as it witnessed a near parallel downwards shift of 20-30bps. The impact of an aggressive MSS auction cut off and softer inflation that added to the downward momentum outperformed the ‘higher supplies' impact of the INR 100 bn auction; the rally was sustained with high volumes traded on NDS-OM.

The benchmark, which had closed at 6.20% in the previous week, registered intra-week gains of 83bps to clinch an intra-week low of 5.37%. It closed much higher (up 23bps to 5.60%) however on statements by government sources suggesting no rate action by RBI in its January monetary policy review.

Source : Equity Bulls

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