Bond yields fall on short-covering; market still hopes for index inclusion

Call rate closes at highest since October 2019 as liquidity tightens

The yield on the 10-year benchmark government bond settled seven basis points lower on Tuesday, as some traders aggressively covered short positions and the market held on to the hope of inclusion of Indian sovereign debt in global indices, dealers said.

The 10-year bond closed at 7.29 per cent yield as against 7.36 per cent yield on Monday. Bond prices rise when yields fall and vice-versa.

While various media reports, citing sources, said that the inclusion of domestic bonds on the JP Morgan emerging market index had been delayed to next year, traders awaited the review of the FTSE Russell