Mumbai: India’s government bond yield on Friday closed at a one-month low after inflation eased and news report suggested that the government may raise limits on foreign investment in debt market.
The 10-year bond yield closed at 7.563%—a level last seen on 14 February, compared to its previous close of 7.633%. Bond yields and prices move in opposite directions.
This was the second session when the bond yield fell following a BTV report that said policy makers are in talks about a new framework for FII cap in govt bonds.
Earlier data from government showed that the retail inflation slowed for second consecutive month to 4.4% in February from 5.1% in January and 5.2% in December.
Wholesale price inflation also eased for the third straight month in February to 2.48% after touching an eight-month high in November, helped by a softer rise in food and fuel prices, government data showed on Wednesday.
Traders are now looking forward to Wednesday’s FOMC meeting for guidance on the Federal Reserve’s rate-hike path.
The Indian rupee closed little changed against US dollar. The home currency ended at 64.94 a dollar, down 0.01% from its Thursday’s close of 64.93. The rupee opened at 64.97 a dollar and touched a high and a low of 64.85 and 64.99 respectively.
Benchmark Sensex fell 1.51%, or 509.54 points, to 33,176. So far this year, it has declined 2.6%.
So far this year, the rupee has fell 1.65%, while foreign investors have bought $1.38 billion in equity and sold $21.70 million in debt market.