Bond yields end lower as rate cut hopes intensify

Written by Agencies | Mumbai | Updated: May 17 2013, 06:55am hrs
Bond yields fell on Thursday on expectations of a rate cut as early as in the June policy review, on the back of benign inflation data.

The 10-year bond yield fell 7 bps to 7.39%. It had fallen to 7.35% on Wednesday, the lowest since December 2, 2009.

The benchmark 5-year swap rate ended 3 bps down at 6.72%, the lowest since September 2011. The one-year rate was down 2 bp to 7.08%, the lowest since January 2011.

Rupee up one paisa

The rupee closed just paise higher at 54.77 against US dollar on better local equities. Continued dollar investments in shares by foreign funds helped the rupee close in the positive zone while firm dollar overseas kept the rupee's rise under check, said traders. At the Interbank Foreign Exchange (Forex) market, the local unit commenced nearly flat at 54.77 a dollar from last close of 54.78.

Euro falls for 6th day

The euro weakened for sixth day against the dollar, the longest losing streak in 12 months, after a report confirmed consumer-price inflation in the region slowed to the least in three years in April.