Bond yields surged more than 9 basis points in the week to January 7 following a sharp rise in US Treasury yields, hawkish minutes by US Federal Open Market Committee (FOMC), and a sharp rise in global crude oil prices. The yield on the benchmark 6.10%-2031 bond, which was trading at 6.4537% last week, breached the 6.50% mark and traded above 6.54% by the mid of this week. It ended at 6.5423% on Friday.
Oil prices were headed for their biggest weekly gains since mid-December as unrest in Kazakhstan and outages in Libya spurred concerns over supply. Brent crude climbed 70 cents, or 0.9%, to $82.69 a barrel during the day.
The domestic markets and the rupee, however, logged gains on Friday. Sensex ended 142.81 points or 0.24% higher at 59,744.65. Similarly, Nifty rose 66.80 points or 0.38% to close at 17,812.70. On a weekly basis, the Sensex advanced 1,490.83 points or 2.55%, while the Nifty gained 458.65 points or 2.64%.
Helped by a weaker greenback against key rivals and positive domestic equities, the rupee managed to gain 8 paise to close at 74.34 against the dollar.
Global markets were mixed ahead of key US jobs data, which will give cues on the Federal Reserve’s rate hike trajectory. Elsewhere in Asia, bourses in Hong Kong and Seoul ended with gains, while Shanghai and Tokyo were in the red. Stock exchanges in Europe were trading on a mixed note in mid-session deals.