Bonds ends mixed amid rate cut hopes; call rates slips

Government bonds (G-Secs) prices ended mixed after a day of heavy trading due to alternate bouts of buying and selling even as rate cut hopes continued to dominate sentiment.
A steep fall in the consumer inflation alongwith negative wholesale inflation data raised expectations of an imminent rate cut by the Reserve Bank of India in the midst of sluggish industrial growth output.
The interbank money market turned weak after a brief rebound owing to lack of demand from borrowing banks in the face of ample liquidity conditions in the banking system.
The 7.59 per cent government security maturing in 2026 rose to Rs 100.0475 from overnight level of Rs 99.92, while its yield edged down to 7.58 from 7.60 per cent.

The 7.59 per cent government security maturing in 2029 spiked to Rs 98.23 from Rs 98.04, while its yield moved down to 7.81 per cent from 7.83 per cent.
The 7.88 per cent government security maturing in 2030 firmed up to Rs 99.48 as compared to 99.33, while yield eased to 7.94 per cent from 7.96 per cent.

The 7.68 per cent government security maturing in 2023 also edged higher to Rs 99.26 as against Rs 99.2050 yesterday, while yield softened to 7.81 per cent from 7.82.
However, 7.72 per cent government security maturing in 2025, the 8.27 per cent government security maturing in 2020 and the 7.28 per cent government security maturing in 2019 were quoted substantially lower at Rs 99.7150, Rs 102.14 and Rs 99.17, respectively.

The overnight call money rates ended sharply lower at 6.40 per cent against Monday's closing value of 7.50 per cent. It hovered in a range of 7.10 per cent and 6.20 per cent during the trade.
Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 93.89 billion in 26-bids at the overnight repo auction at a fixed rate of 6.75 per cent this evening.
It sold securities worth Rs 33.62 billion from 28-bids at the overnight reverse repo auction at a fixed rate of 5.75 per cent late yesterday.