Bond yield hits 6-week low as Budget sticks to path of fiscal consolidation

Govt move to tax high-value insurance policies may hit demand for long-term bonds: Analysts

Sovereign bonds strengthened sharply on Wednesday despite the government announcing its highest gross market-borrowing programme, as the Budget adhered to fiscal consolidation and refrained from extra sales of dated securities this year.

The yield on the 10-year benchmark government bond slid six basis points to settle at 7.28 per cent, the lowest closing level since December 15, 2022.

The government announced a gross market borrowing of Rs 15.4 trillion and a net market borrowing of Rs 11.8 trillion, largely in line with expectations.

With the government facing a fiscal slippage in absolute terms due to higher-than-expected nominal GDP growth in