Budget 2016: Bond prices continue to fall on weak demand; Budget in focus

Government bonds (G-Secs) prices remained bearish for the third-straight day due to consistent profit-taking by market participants and lack of demand from corporates.

Foreign Portfolio Investors (FPIs) and retail investors did not want to take positions ahead of the Union Budget, a trader commented.

Interbank call money rates recovered modestly on the back of some demand from borrowing banks amid tight liquidity conditions in the banking system.

The 7.59% government security maturing in 2026 declined to Rs 98.34 from Rs 98.41 yesterday, while its yield moved up to 7.83% from 7.82%.

The 7.88% government security maturing in 2030 moved down to Rs 97.35 as compared to Rs 97.45 previously, while its yield rose to 8.20% from 8.19%.

The 8.27 % government security maturing in 2020 fell to 101.3050% from to 101.47, while its yield firmed up to 7.90% from 7.85%.

The 7.72% government security maturing in 2025, the 7.59% government security maturing in 2029 and the 7.68% government security maturing in 2023 were also quoted lower at Rs 98.03, Rs 95.4150 and Rs 97.89, respectively.

The overnight call money rates ended firmly higher at 6.95% from Tuesday's finish of 6.30%. It largely moved in range of 7.15% and 6.50% in early trade.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 208.31 billion in 43-bids at one-day repo auction at a fixed rate of 6.75% Wednesday evening, while it sold securities worth Rs 49.88 billion from 29-bids at the one-day reverse repo auction at a fixed rate of 5.75% late on Tuesday.