Bond yields rise

Yields on government bonds on Friday increased on concern the Reserve Bank of India (RBI) may not cut policy rates, as the economy grew 5.5 per cent in the June quarter, marginally higher than market expectations. “The growth rate at 5.5 per cent was a pleasant surprise and provided good sentiment, as the market had expected it to be below 5.3 per cent,” said Abraham Chacko, executive director at Federal Bank. Yields on the 10-year benchmark government bond closed at 8.24 per cent, five basis points higher than Thursday’s 8.19 per cent. After the first quarter gross domestic product data was out, yields saw a constant upward trend. Economists feel inflation would weigh on RBI’s decision during the policy review.