Yield on benchmark govt bond hits lowest level seen since Nov 2017
Shrugging off the indifferent growth numbers and the poor corporate earnings, benchmark indices hit lifetime highs on Monday.
Buoyed by hopes of a rate cut by the Reserve Bank of India (RBI) on June 6, a fall in the prices of crude oil and expectations of favourable policies by the government, investors added risk across sectors.
The 30-share BSE Sensex soared over 553 points to close at a record high of 40,267.62 while the 50-share Nifty surged nearly 166 points to settle at 12,088.55. Foreign investors bought stocks worth around $440million, provisional data from the exchanges showed.
Meanwhile, bonds continued to rally smartly and sent the yield on the benchmark government bond to 6.98%, the lowest level seen since November 2017.
Foreign investors have been buyers in both stocks and bonds in May investing close to $ two billion. They picked up bonds worth more than $750 million in the six sessions to May 31.
The inflows together with the fall in crude oil prices have helped the rupee appreciate and the currency closed at 69.26 against the greenback on Monday, a gain of 43 paise over Friday’s close. Analysts, however, are concerned the currency’s outperformance in the region in the past three months could hurt exports as rival currencies become cheaper.