Bonds rise on buying support

Government securities (G-secs) rose on good buying support from banks and companies. Bonds have been on a losing streak due to fears the Reserve Bank of India (RBI) will continue to raise interest rates. Expectations of a government debt-switch programme, which would involve selling longer-dated debt, is also denting sentiment.

Meanwhile, Fitch Ratings warned on Tuesday the setback suffered by the ruling Congress in recent state elections could imperil the country's fiscal deficit target by tempting the government to have less restraint on spending.

The 8.83 per cent G-Sec maturing in 2023 climbed to Rs 99.95 from Rs 99.51 on Monday, while its yield fell to 8.84 per cent from 8.90 per cent. The 7.16 per cent G-Sec maturing in 2023 surged to Rs 87.46 from Rs 87.14, while its yield declined to 9.17 per cent from 9.23 per cent. The 8.12 per cent G-Sec maturing in 2032 also rose to Rs 95.33 from Rs 95.05, while its yield moved down to 9.03 per cent from 9.09 per cent. The 7.28 per cent G-Sec maturing in 2019, the 8.28 per cent G-Sec maturing in 2027 and the 8.24 per cent maturing in 2027 also closed higher at Rs 93.16, Rs 92.30 and Rs 92.12, respectively.

Call rates end lower
Call money rates ended lower at the overnight market due to lack of demand from borrowing banks. The rates ended lower at seven per cent from 7.75 per cent on Monday. It moved in a range of 7.80 per cent and 6.90 per cent.

RBI, under the liquidity adjustment facility, purchased securities worth Rs 23,729 crore from 32 bids at the one-day repo auction at a fixed rate of 7.75 per cent, while its sold securities worth Rs 9,281 crore from 13 bids at the one-day reverse repo auction at a fixed rate of 6.75 per cent.