Gilts & Bonds Market Bullish Trend Seen

The bullish sentiment in the secondary debt market will be sustained during the week. However, activity in the market could be affected by he development in the foreign exchange market.

Dealers said the prices of government securities are expected to appreciate by around 10 to 15 paise across the board since there is buying interest among traders. However, if the RBI resorts to squeeze in liquidity to curtail the forex volatility, the impact will be felt on the debt market trading and the prices of the securities will see a steep fall.

Last week, the wholesale debt market at the NSE clocked a trading volume of Rs 2,654.69 crore as against Rs 2,819.74 crore with the highest volume of Rs 867.72 crore on Tuesday and a low of Rs 331.98 crore on Monday. The average daily volume last week was Rs 530 crore as compared with Rs 469 core in the previous week. Government securities saw trades worth Rs 2,188.22 crore and the treasury bill segment witnessed a volume of Rs 161 crore.

 

The weighted average yield on government securities maturing within three years was 10.67 per cent, three-seven years were traded at 11.65 per cent and 7-10 years were traded at 12.06 per cent.

The treasury bills maturing within the next 91 days were traded at a weighted average yield of 7.02 per cent whereas those maturing after 91 days and between 180 days was 7.46 per cent.