Bonds turn bearish as rupee weakens

The 8.28% G-sec maturing in 2027 fell to Rs 94.15 from Rs 94.39 previously, while its yield moved up to 9.03% from 8.99%

Indian government bonds snapped two days of gains on Wednesday as traders trimmed positions ahead of Friday's sale of a new 10-year paper, though hopes of more debt purchases by the Reserve Bank of India helped recoup some losses.

The 8.28 per cent G-sec maturing in 2027 fell to Rs 94.15 from Rs 94.39 previously, while its yield moved up to 9.03 per cent from 8.99 per cent.

The 7.16 per cent G-sec maturing in 2023 declined to Rs 88.21 from Rs 88.36, while its yield rose to 9.04 per cent from 9.01 per cent.

The 8.12 per cent G-sec maturing in 2020 fell to Rs 95.82 from Rs 96.04, while its yield rose to 8.93 per cent from 8.89 per cent. The 7.28 per cent G-sec maturing in 2019, the 8.32 per cent G-sec maturing in 2032 and the 8.33 per cent G-sec maturing in 2026 were also quoted lower, at Rs 93.24, Rs 92.40 and Rs 93.95, respectively.

Some traders said the Reserve Bank of India's discomfort with yields rising above nine per cent might trigger another round of open market operations (OMO) after Monday's debt purchase.

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 8.73 per cent, from 8.80 per cent on Wednesday.

It moved in a range of 8.80 per cent and 8.23 per cent. The Reserve Bank of India under the Liquidity Adjustment Facility purchased securities worth Rs 41,180 crore in 63 bids at the one-day repo auction at a fixed rate of 7.75 per cent.