Bonds drop on fresh selling pressure

Government bond prices reacted downwards on fresh selling pressure from banks and companies.

The 9.15 per cent government security maturing in 2024 fell back to Rs 103.94 from Rs 104.55 yesterday, while its yield firmed up to 8.64 per cent from 8.56 per cent. The 8.79 per cent government security maturing in 2021 dropped to Rs 101.96 from Rs 102.55, while its yield rose to 8.49 per cent from 8.40 per cent.

The 7.83 per cent government security maturing in 2018 declined to Rs 96.97 from Rs 97.32, while its yield hardened to 8.45 per cent from 8.38 per cent. The 8.97 per cent government security maturing in 2030, the 7.80 per cent government security maturing in 2021, the 8.30 per cent government security maturing in 2040 and the 8.08 per cent government security maturing in 2022 were also quoted lower at Rs 101.90, Rs 95.33, Rs 95.00 and Rs 96.70, respectively.

The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 86,545 crore from 45 bids at one-day repo auction at a fixed rate of 8.50 per cent, while sold securities worth Rs 290 crore from two bids at one-day reverse repo auction at a fixed rate of 7.50 per cent.

Call rate eases
The call rate eased further at the overnight call money market on Wednesday due to lack of demand from borrowing banks. The rate closed lower at 8.55 per cent from yesterday’s closing level of 8.60 per cent. It moved in a range of 8.70 per cent and 8.50 per cent.