MUMBAI (Reuters) - The BSE Sensex extended gains on Monday, while bonds held onto prior advances, after data showed inflation slowed in March, raising hopes the central bank would cut interest rates at its policy review on May 3.
The Nifty was up 0.56 percent as of 12.36 p.m., after data showed wholesale price inflation at 5.96 percent in March, lower than 6.84 percent in February and below expectations for 6.4 percent.
The 10-year government bond yields were trading at 7.84 percent, down 3 basis points (bps) from their close of 7.87 percent on Friday. Bond prices had already gained prior to the data after Bloomberg TV reported the March inflation number.
The 1-year overnight index swap (OIS) rate was down 4 bps at 7.32 percent from its close on Friday, while the rupee trimmed falls against the dollar to 54.64/65 from around 54.71 before the data and its close of 54.52/52 on Friday.
(Reporting by Mumbai markets team; Editing by Subhranshu Sahu)
