Gilts drop on heavy selling; call rates remain weak

The government bond (G-Sec) prices dropped sharply in a widespread selling by corporates and market participants amid caution ahead of key macro data.
The interbank call money rate remained weak due to lack of demand from borrowing banks amid high liquidity movement.
Market players and bond investors pared huge long positions ahead of key macro economic data -- industrial production (IIP) and inflation later this week, a trader said.
The 10-year benchmark bond 8.40 per cent maturing in 2024 slipped to Rs 102.37 from Rs 102.7350 yesterday, while its yield rose to 8.03 per cent against 7.97 per cent.
The 8.27 per cent government security maturing in 2020 declined to Rs 100.94 against Rs 101.17, while its yield jumped to 8.04 per cent from 7.98 per cent.

The 8.60 per cent government security maturing in 2028 slumped to Rs 103.91 from Rs 104.31, while its yield firmed up to 8.11 per cent from 8.06 per cent.

The 7.72 per cent government security maturing in 2025 eased to Rs 99.28 compared with Rs 99.52, while its yield moved up to 7.82 per cent from 7.79 per cent.
The 8.15 per cent government security maturing in 2026, the 7.88 per cent government security maturing in 2030 and the 8.83 per cent government security maturing in 2023 were also quoted substantially lower at Rs 100.35, Rs 98.60 and Rs 104.34, respectively.

The overnight call money rates finished lower at 6.30 per cent from Tuesday's closing level of 7 per cent after hovering 7.50 per cent and 6.25 per cent in early trade.
Meanwhile, the Reserve Bank of India under the Liquidity Adjustment Facility (LAF) purchased securities worth Rs 140.51 billion in 42-bids at the one-day repo auction at a fixed rate of 7.25 per cent this morning, while it sold securities worth Rs 21.48 billion from 20-bids at the one-day reverse repo auction at a fixed rate of 6.25 per cent yesterday evening.