The yield on India’s most heavily traded federal bond fell on Thursday as the central bank set better-than-expected prices at a buyback auction, with the drop limited by a Rs 15,000 crore sale on Friday.
The yield on the benchmark 10-year bond, which registered only 16 deals, ended at 6.91%, above its previous close of 6.89%. The yield on the most traded 6.07% bond maturing in 2014 ended at 6.59%, below Wednesday’s closing of 6.61%.
Meanwhile, rupee dropped to fresh one-month lows as the stock market fell for the fifth time in six sessions, with gains in the dollar versus the euro also adding to the downward pressure. It closed at 48.21/22 per dollar, 0.2% weaker than its previous close of 48.13/14. It fell as low as 48.32 during trade, its weakest since May 18. The central bank said it had bought back bonds worth Rs 4,620 crore, including Rs 2,935 crore of 7.38%, 2015, at a cut-off price of Rs 103.54.