Informist, Wednesday, May 3, 2023
By Parth Singh
NEW DELHI – Yields on corporate bonds slipped in the secondary market today amid a pickup in trade volume, following a similar movement in government bonds, ahead of the US Federal Open Market Committee’s monetary policy decision, due after market hours today, dealers said.
While yields on five-, and 10-year corporate bonds fell by 7-8 basis points in the secondary market today, those on three-year papers declined just 3 bps.
This has come as the 10-year benchmark 7.26%, 2033 government bond ended at its lowest level since Apr 7, 2022 as US Treasury yields slumped ahead of the outcome of the US central bank’s policy meeting. Investors expect the US rate-setting panel to deliver a 25-basis-point rate hike in its current cycle.
“The fall in government bond yields, which was primarily due to market expecting a final hike by the US Fed, brought down the yields in the corporate bond market. A particular section is also focusing towards a pause that has lifted the sentiment,” a senior debt market official said.
While banks and insurance companies were active on the buying side in the secondary market of corporate bonds, primary dealers were selling in the long-term segment, dealers said. Mutual funds were active at the shorter end segment for requirement-based trading.
Bonds issued by Housing Development Finance Corp, REC, Housing And Urban Development Corp, Andhra Pradesh State Beverages Corp, LIC Housing Finance, National Bank For Agriculture And Rural Development, UP Power Corp, National Housing Bank, and Kotak Mahindra Prime were traded the most across tenures today.
The US rate-setting panel is expected to announce a 25 bps interest rate hike at the conclusion of its meeting, although a section of the market has started to expect a pause, dealers said.
Investors are waiting for Fed Chair Jerome Powell’s statement, which is likely to provide further guidance on potential rate cuts or prolonged pause going ahead, dealers said.
Some market participants seem confident that the decision of the Fed may not impact the domestic central bank’s future policy decisions. “Whether Fed hikes rate or not, it will not impact the domestic rate hike cycle, since domestic data suggests that this is the peak of the rate hike cycle,” a debt dealer with a mid-sized brokerage firm said.
There was a pick-up in trade volume today. Deals worth 78 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 68 bln rupees on Tuesday.
UDAY BONDS
In the secondary market, none of the Ujwal DISCOM Assurance Yojana bonds were traded, according to the RBI’s Negotiated Dealing System-Order Matching System.
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Aditya Sakorkar
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2023. All rights reserved.
Source: Cogencis
![[Geojit Comtrade] Daily report on Natural Rubber: December 4, 2012](https://img.globalrubbermarkets.com/2024/08/geojit-comtrade-daily-report-on-natural-rubber-december-4-2012.jpg?resize=120%2C86&ssl=1)
