Bonds maintain downtrend

The 7.16% govt security maturing in 2023 dropped to Rs 89.44 from Rs 89.93 previously, while its yield climbed to 8.82% from 8.74%

Government bonds fell for the fifth straight session on Wednesday, as foreign investors sold debt ahead of a coupon payment later this month that would trigger withholding taxes.

Trading on the 10-year bond will be suspended on November 18 for the coupon payments. Foreign investors typically sell bonds ahead of these payments to avoid being charged withholding tax.

The 7.16 per cent government security maturing in 2023 dropped to Rs 89.44 from Rs 89.93 previously, while its yield climbed to 8.82 per cent from 8.74 per cent.

The 8.28 per cent G-sec maturing in 2027 dipped to Rs 94.47 from Rs 94.97, while its yield rose 8.98 per cent from 8.92 per cent. The 8.12 per cent G-sec maturing in 2020 fell to Rs 96.10 from Rs 96.45, while its yield gained to 8.87 per cent from 8.80 per cent.

The 7.28 per cent G-sec maturing in 2019, the 8.33 per cent G-sec maturing in 2026 and 8.07 per cent G-sec maturing in July, 2017 were also quoted lower at Rs 93.33, Rs 94.15 and Rs 98.99, respectively.

Call rates end higher

Call rates ended higher at the overnight market, owing to sustained demand from borrowing banks. The rates finished higher at 8.75 per cent, against seven per cent on Tuesday. It moved in a range of 8.80 per cent and 7.75 per cent.

The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 30,489 crore from 45 bids at the one-day repo auction at a fixed rate of 7.75 per cent, while it sold securities worth Rs 53 crore from two bids at the one-day reverse repo auction at a fixed rate of 6.75 per cent.