Bonds rally as traders estimate govt's stimulus likely to see limited spend

Sovereign bonds rose in India as traders estimated the cash outgo for the government from its Rs 20-trillion stimulus package may be less than previously feared.

The yield on the most-traded 6.45 per cent 2029 note dropped 10 basis points to 6 per cent, extending Wednesday’s 7-basis point fall. The yield on the 7.57 per cent 2033 debt, an auction bond for Friday, declined six basis points.

Finance Minister Nirmala Sitharaman Wednesday announced the first component of the package that will provide $72 billion in liquidity to small businesses and power utilities.