Informist, Thursday, Jul 13, 2023
By Parth Singh
NEW DELHI – Yields on corporate bonds fell across tenures in the secondary market today, following a better-than-expected US CPI inflation print for June after market hours on Wednesday, dealers said.
Some mutual fund houses and insurance companies were on the buying side in the secondary market, while banks were sellers, dealers said.
Expectations of less aggressive monetary policy tightening by the US Federal Reserve were said to have channelled into Indian debt markets today, amid a slump in US Treasury yields. This was after the US CPI print fell to 3% in June, against 3.1% expected by economists in a Dow Jones poll. The print was at 4% in May.
“Our market followed the fall in US yields after their CPI came better. There was not much reaction to the domestic data since a long pause is already factored in here,” a debt dealer at a private dealership said.
Back home, India’s CPI inflation rose to a three-month high of 4.81% in June, primarily due to a jump in prices of key food items, mainly vegetables. According to a poll by Informist, headline inflation for the month was seen at 4.6%.
However, market participants attached more significance to the fall in US Treasury yields than the higher-than-expected domestic CPI print for June, due to fewer concern on the domestic monetary policy front going forward, dealers said.
Meanwhile, in the primary market, State Bank of India raised 31.01 bln rupees through Basel-III compliant additional tier-I bonds at a coupon of 8.10%.
Bonds issued by REC, Tata Capital Housing Finance, State Bank of India, ICICI Bank, Goswami Infratech, National Bank for Agriculture and Rural Development, and U.P. Power Corp were traded across tenures.
Trade volumes in the market were on the lower side today. Deals aggregating 60.63 bln rupees were recorded on the National Stock Exchange and BSE combined, against 91.49 bln rupees on Wednesday.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 170 mln rupees were traded at a weighted average yield of 7.4400-7.5893%, according to data from RBI’s Negotiated Dealing System-Order Matching System.
* 100 mln rupees of Uttar Pradesh’s 2025 bonds were traded at 7.4400%
* 50 mln rupees of Jammu & Kashmir’s 2025 bonds were traded at 7.4399%
* 20 mln rupees of Haryana’s 2025 bonds were traded at 7.5893%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Akul Nishant Akhoury
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