Bonds gain for second day as Rupee stabilises

Written by Reuters | Mumbai | Updated: Aug 31 2013, 08:28am hrs
Government bonds rose for a second day on Friday after RBI set bullish cutoffs for the benchmark paper and a bounce in the rupee helped by suspected central bank intervention.

India will release economic growth data for the June quarter after market hours on Friday, which is likely to show economic growth likely slowed to 4.7% in the fiscal first quarter that began in April. Slowing growth, however, may not translate into monetary easing as the central bank tries to stabilise the rupee by tightening cash. However, bonds rallied after RBI set lower-than-expected cutoff yields for the 10-year paper at a R17,000 crore bond sale. The benchmark 10-year bond yields fell 17 bps to 8.60%. Volumes remained low at Rs 19,760 crore.