Bonds shot-up on frantic buying, yields tumble

After a three day range-bound movement, government bonds (G-Secs) staged a smart rally on the back of heavy demand from banks and corporates amid widespread expectation of an interest rate cut by RBI.
A strong rally in domestic equities and currency market following the Federal Reserve's decision to leave key rate unchanged after weeks of speculation, too, supported the rally.
However, interbank call rates fell back after a brief recovery due to lack of demand from borrowing banks in the face of adequate liquidity in the banking system.
The benchmark 7.59 per cent government security maturing in 2026 rose to Rs 102.7350 from overnight close of Rs 102.2925, while its yield slumped to 719 per cent against 7.24 per cent.

The 7.59 per cent government security maturing in 2029 zoomed to Rs 102.49 as compared to Rs 101.72, while yield plunged to 7.28 per cent from 7.38 per cent.
The 7.88 per cent government security maturing in 2030 climbed to Rs 105.01 from Rs 104.25, while yield tanked to 7.29 per cent from Rs 7.38 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 quoted substantially higher at Rs 103.18, Rs 102.8375 and Rs 103.0625, respectively.
The overnight call money rate retreated sharply to 6.05 per cent from Wednesday's close of 6.50 per cent after trading in a narrow range of 6.55 per cent and 6.60 per cent earlier.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF),purchased securities worth Rs 96.80 billion in 24-bids at one-day repo auction at a fixed rate of 6.50 per cent this evening.
It sold securities worth Rs 20.67 billion from 18-bids at the overnight reverse repo auction at a fixed rate of 6.00 per cent late yesterday.