India’s 10-year bonds gained for the first time in more than a week on speculation that yields near their highest level since 2008, would attract investors. Foreign investors have bought $1.17 billion in rupee- denominated debt this month, bolstering holdings to a record $21.2 billion as of May 18, exchange data show. The yield on the 7.80 per cent, 10-year note climbed to 8.35 per cent on May 20, the highest level for a benchmark 10-year bond since October 2008, after a report earlier in the week showed wholesale prices rose more than economists estimated.
RUPEE DECLINES
The rupee dropped to the weakest level in two months after global funds reduced holdings of the nation’s assets as wholesale prices rose more than forecast. The benchmark Sensitive Index of shares dropped 1.1 per cent last week after official data showed inflation was 8.66 per cent in April, compared with the median 8.5 per cent forecast of economists in a Bloomberg survey. The rupee dropped 0.5 per cent to 45.2375 per dollar at close in Mumbai.
CALL RATES EASE
Call rates eased on the overnight call money market on Monday, as supply was higher than the demand in the banking system. The overnight call money rate moved in a range of 7.50 per cent and 7.15 per cent before finishing at 7.40 per cent from 7.45 per cent last weekend.
