Informist, Wednesday, Oct 4, 2023
By Subhana Shaikh
MUMBAI – Yields on corporate bonds remained steady in the secondary market today as investors kept to the sidelines, amid a rise in US Treasury yields and caution ahead of the Reserve Bank of India’s three-day monetary policy meeting, which began today, dealers said.
While mutual funds were said to have been active today as a part of their portfolio churning exercise, banks were said to have been buying corporate bonds, dealers said.
Bonds that changed hands on the bourses included State Bank of India, Andhra Pradesh State Beverages Corp, Cholamandalam Investment and Finance Co, LIC Housing Finance Co, Power Finance Corp, Indiabulls Housing Finance, National Bank for Agriculture and Rural Development, Navi Finserv, Shriram Transport Finance Co and Uttar Pradesh Power Corp.
“Corporate bond market was largely steady today. Rise in US Treasury yields is a cause of concern for the market, but buying from a large insurance player supported the market,” a dealer at a fund manager at a mid-sized brokerage firm said.
Yield on the benchmark 10-year US Treasury note rose to a fresh 16-year high on Tuesday amid concerns that the Federal Reserve would continue to hike interest rates for an extended period, following an unexpected surge in job openings in August.
On the domestic front, investors avoided placing large bets ahead of the RBI’s Monetary Policy Committee meeting outcome on Friday, keeping trade volume subdued. As at 1500 IST, deals worth 35.63 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 42.19 bln rupees on Tuesday at 1500 IST.
According to a poll by Informist, the Monetary Policy Committee is widely expected to leave the policy repo rate unchanged at 6.50% for the fourth consecutive meeting. This is despite the fact that upside risks to inflation persist in the form of higher food inflation and rising crude oil prices.
Further, poll respondents unanimously expected the panel to maintain its ‘withdrawal of accommodation’ stance. The panel has hiked the repo rate by 250 basis points between May 2022 and February.
Today, deals aggregating up to 74.03 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 84.99 bln rupees recorded on Tuesday.
UDAY BONDS
In the secondary market, no of the Ujwal DISCOM Assurance Yojana bond was traded, according to data from the Reserve Bank of India’s Negotiated Dealing System-Order Matching System.
BENCHMARK LEVELS FOR CORPORATE BONDS:
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Edited by Aditya Sakorkar
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