Higher US interest rates typically leads to a stronger dollar and reduces the appeal of emerging market assets for global investors
The rise in bond prices came despite an increase in India's consumer price index inflation, which strengthens the case for the Reserve Bank of India to continue tightening monetary policy
Second rate hike in two months by lender after RBI's rate setting committee hiked benchmark repo rate by 50 bps to 5.4%; new MCLR at 7.90-8.40%
The U.S. dollar scaled a fresh 20-year peak, making greenback-priced gold less attractive for overseas buyers
According to the latest Reserve Bank of India (RBI) data, loans to micro, small, medium, and large industries rose to Rs 31.82 trillion as of July end, up 10.5 per cent year-on-year (YoY).
Bond yields fall as HDFC's Rs 10,000 crore debt sale plan propels custodian flows
The latest bond coupon at 7.26 per cent is higher than expected
A decline in domestic headline retail inflation to a five-month low in July also bolstered the appetite for bonds
US retail sales flat in July; core sales rise; retailer Target's quarterly profit slumps
The higher yields have provided a good entry point for debt investors after years of low yields
A rise of one basis point in the 10-year bond yield corresponds to a fall of roughly 7 paise in price
Last month, SBI's board had provided approval for raising up to Rs 11,000 crore via additional tier-I and tier-II bonds to meet regulatory requirements and support business growth
Softening of crude oil prices reduces upside risks to India's inflation, given that the country is among the biggest importers of the commodity
Markets perceive Fed as being less hawkish
The Indian rupee weakened slightly against the dollar on Tuesday, while bond yields were little changed, as investors awaited the outcome of the US Federal Reserve's policy meeting
Indian bond yields tracked a slide in their US peers and the rupee inched higher amid a modest rise in other Asian currencies
Banks are unlikely to take a big hit on profitability this quarter due to rising bond yields, which may eat up 5.3 per cent (Rs 11,790 crore) of their net income in the worst-case scenario
Bankers have sought permission to park a larger quantum of securities in the portfolio than is currently permitted amid an environment of rising bond yields.
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A narrower spread makes it less attractive for foreigners to invest in rupee assets