Bonds retreat on fresh selling, weak rupee

Government bond (G-Secs) prices fell after a brief recovery following renewed selling pressure from corporates as well as foreign funds.
Sluggish equities and unwinding of bond portfolios by foreign portfolio investors (FPIs) against the backdrop of depreciating rupee also dampened the sentiment.
The home currency closed at a fresh 29-month low of 68.23 against the dollar.
The interbank money market also remained under immense pressure owing to lacklustre demand from borrowing banks on the back of adequate liquidity in the banking system.
The 7.88 per cent government security maturing in 2030 declined to Rs 99.07 from Rs 99.24 yesterday, while its yield edged up to 7.99 per cent.

The 7.72 per cent government security maturing in 2025 moved down to Rs 99.43 compared with Rs 99.54, while its yield gained to 7.81 per cent.

The 7.59 per cent government security maturing in 2026 dropped to Rs 99.3275 as against Rs 99.52, while its yield rose to 7.69 per cent.
The 8.27 per cent government security maturing in 2020, the 7.68 per cent government security maturing in 2023 and the 7.59 per cent government security maturing in 2029 also quoted substantially lower at Rs 102.39, Rs 99.59 and Rs 97.47, respectively.
The overnight borrowing rates eased further to 6.00 per cent from Wednesday's closing level of 6.25. It largely fluctuated between a high of 7.10 and a low of 5.70 in early trade.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 135.08 billion in 27-bids at the one-day overnight repo auction at a fixed rate of 6.75 per cent this evening, while it sold securities worth Rs 45.09 billion from 28-bids at the one-day reverse repo auction at a fixed rate of 5.75 per cent late yesterday.