Government bonds (G-Secs) prices fell sharply following heavy selling pressure from corporates as well as foreign funds on weak rupee sentiment.
The interbank call money rate also retreated due to lacklustre demand from borrowing banks supported by comfortable liquidity conditions in the banking system.
Massive unwinding of bond portfolios by the Foreign Portfolio Investors (FPIs) against the backdrop of depreciating rupee also dampened the sentiment, a dealer said.
The rupee plunged to close at 2-year low of 66.82 against the American currency.
The benchmark 7.72 per cent government security maturing in 2025 slumped to Rs 99.4350 from 99.7575 previously, while its yield rose to 7.80 per cent.
The 7.88 per cent government security maturing in 2030 dropped to Rs 99.5325 against Rs 99.8775, its yield firmed up to 7.93 per cent.
The 8.40 per cent government security maturing in 2024 declined to Rs 102.70 compared to Rs 102.9850, where as yield moved up to 7.97 per cent.
Thee 7.68 per cent government security maturing in 2023 slipped to Rs 98.4375 from Rs 98.71, while its yield edged-up to 7.94 per cent.
The 8.27 per cent government security maturing in 2020, the 8.12 per cent government security maturing in 2020 and the 7.35 per cent government security maturing in 2024 were also quoted substantially lower at Rs 101.33, Rs 100.59 and Rs 96.25, respectively.
The overnight call money rates fell back to 6.75 per cent from last Friday's close of 7.15 per cent. It opened steady at 7.15 per cent and traded in a range of 7.25 per cent and 6.70 per cent during the trade.
Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 22.46 billion in a 7-bids at the overnight repo auction at a fixed rate of 7.25 per cent this morning.
