Bonds extend rally on rising demand, call rates jump

Government bonds (G-Secs) continued their upsurge for the second straight day following sustained buying by market participants as well as foreign funds, while yields tumbled to three-year low.
The interbank call rates staged a smart rebound on the back of strong demand from borrowing banks owing to tight liquidity conditions in the banking system.
The benchmark 7.59 per cent government security maturing in 2029 climbed to Rs 102.6850 as compared to Rs 102.49 yesterday, while its yield dropped to 7.26 per cent from 7.28 per cent.
The 7.59 per cent government security maturing in 2026 rose to Rs 102.89 from Rs 102.7350, while yield declined to 7.16 per cent from 7.19 per cent.

The 7.88 per cent government security maturing in 2030 firmed up to Rs 105.29 compared to Rs 105.01, while yield slumped to 7.26 per cent from Rs 7.29 per cent.
The 7.61 per cent government security maturing in 2030, the 7.68 per cent government security maturing in 2023 and the 7.72 per cent government security maturing in 2025 were also quoted higher at Rs 103.34, Rs 102.94 and Rs 103.2050, respectively.

The overnight borrowing rate finished sharply higher at 6.90 per cent, recovering from Thursday's close of 6.05 per cent. It opened at 6.50 per cent and hovered between 6.90 per cent and 6.00 per cent.

The 3-day call money rate ended at 6.55 per cent after trading between 6.60 per cent and 6.15 per cent during the trade.
Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 34.95 billion in 8-bids at a three-day repo auction at a fixed rate of 6.50 per cent this evening.
It sold securities worth Rs 79.90 billion from 29-bids at the overnight reverse repo auction at a fixed rate of 6.00 per cent late yesterday.