Govt bonds, rupee strengthen as crude prices plunge on growth concerns

A decline in domestic headline retail inflation to a five-month low in July also bolstered the appetite for bonds

Government bond yields plummeted on Wednesday as speculation of India’s sovereign debt being included on global bond indexes and a recent slump in crude oil prices bolstered the market’s appetite, dealers said. 

Yield on the 10-year bond — ‘6.54 per cent 2032’ — hurtled 10 basis points to close at 7.19 per cent on Wednesday. Bond prices and yields move inversely — one basis point fall in yield on the 10-year paper corresponds to a rise in price of roughly seven paise.

The rupee settled at 79.45 per US dollar as against 79.66 in the previous close.

The bond and currency