Bonds rally on strong demand, call rates advance

The government bond prices rallied sharply due to strong appetite from banks and corporates.
Overnight call money rates also edged up further on better demand from borrowing banks amidst shortage of funds in the banking system.
The 8.83 per cent 10-year benchmark bond maturing in 2023 surged to Rs 100.0625 from Rs 99.84, while its yield fell to 8.82 per cent from 8.85 per cent.
The 8.60 per cent government security maturing in 2028 climbed to Rs 98.54 from Rs 98.3875, while yield slipped to 8.78 per cent from 8.80 per cent.
The 8.40 per cent government security maturing in 2024 rose to Rs 98.71 from Rs 98.44, however yield moved down to 8.60 per cent against 98.44 per cent.

The 8.12 per cent government security maturing in 2020, the 8.27 per cent government security maturing in 2020, the 8.35 per cent government security maturing in 2022 and 8.28 per cent government security maturing in 2027 also quoted substantially higher at Rs 96.8975, Rs 98.10, Rs 97.1250 and Rs 95.22 respectively.
The overnight call money rates finished better at 8.25 per cent from 8.00 last Friday. It fluctuated between 8.80 per cent and 7.00 per cent earlier.
Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 212.98 billion in 59-bids at the one day repo auction at a fixed rate of 8.00 per cent.