Indian Bonds Slide as RBI’s Choice of Purchase Papers Disappoint

Indian Bonds Slide as RBI’s Choice of Purchase Papers Disappoint

(Bloomberg) -- Indian sovereign bonds slumped as the central bank’s choice of relatively illiquid papers for its bond-purchase program disappointed traders. Surging global oil prices also weighed on sentiment.

The yield on the 5.63% bond maturing in 2026 rose as much as 13 basis points to 5.89%, while the 6.64% 2035 bond yield climbed eight basis points. The benchmark 10-year yield advanced nine basis points to 6.18%, its biggest jump in nearly three months.

“The choice of illiquid papers has disappointed traders,” said Debendra Dash, head of fixed income at AU Small Finance Bank in Mumbai. “Traders were hoping the RBI will include the 5-year paper,” in the purchase list as it had asked underwriters to buy that paper.