Budget 2022 has unnerved bond markets. The 10-year govt bond yields have risen nearly 3% in two days. What's behind the sharp upswing in yields, and what does it mean for equity investors?
Spot gold was down 0.3% at $1,816.22 per ounce by 13:56 ET. U.S. gold futures settled down 0.3% at $1,816.50
The rupee was at 74.61 to a dollar on November 13 - the beginning of Samvat. It ended at 74.46 to a dollar on Wednesday
The central bank also retained the GDP growth forecast at 9.5% for the on-going fiscal year and revised CPI inflation projection downward to 5.3% which also supported sentiment
The 10-year bond yield closed at 6.28 per cent, its highest level since April 17, 2020
This is a different strategy than what played out until last month, where the central bank seemed more focused on keeping the 10-year bond yields at 6%
This was after the RBI assured the market of ample liquidity and another round of secondary market purchase of Rs 35,000 crore
RBI purchased Rs 25,000 cr worth of bonds under G-SAP or government securities acquisition programme, under which it has committed to buying Rs 1 trn worth govt paper between April and June
The yellow metal lost sheen as investors shifted out of this safe-haven asset to more lucrative investment options, such as cyclical stocks
A bank placed a wrong price quote, which led to a negative yield as the paper was nearing maturity
Market sentiment tracked global shares, which were mixed as initial optimism over the US Senate's passing of a $1.9 trillion stimulus bill gave way to inflation fears
10-year government bond yield hardened to 6.23 per cent on Friday, up 0.05 per cent from 6.18 per cent on Thursday, February 25
The market breadth was in favour of the bears with the advance-decline ratio at nearly 1:2
If the central bank made it a one-off exercise, then the yields should climb back, the bond dealers said
The yield spread between the most-traded 10-year notes to two-year debt is at its highest since 2010 on concerns the government will expand record bond sales
The MPC sharply trimmed its April-September inflation projection to 4.7% to 5.1% from the 5.1% to 5.6% it predicted in February
Their cost of funds was up 40 basis points year-on-year during the first half of FY18, and could rise further as bond yields continue to head north
Acharya's criticism on interest rate risk has not gone down well among public sector bankers
Hits a high of 7.32 per cent in early morning trades, compared with a close of 7.22 per cent on Wednesday
Benchmark bond yield was seen at 7.45%, the highest since May 5