Mumbai: Bonds fell to the lowest level of pre-pandemic on Monday even when Sensex jumped more than 1% to close 651 points higher and the rupee obtained 27 Paise.
The cost of borrowing for the government, as reflected in the results of 10-year bonds, rose to more than a home loan interest rates offered by most banks to two years high of 6.59%.
While the Union Bank of India loan from 6.4%, the Bank of Baroda offers it at 6.5%.
Bond prices have a reverse relationship with results, so one falls even like the others increases.
In equity, the market opens a strong, traces Asian shares and closes higher at expectations that there will be a pro-growth budget.
The Nifty, too, was increased by 18,000 to close 1.1% higher at 18.003.
However, analysts estimate volatility because the omicron variant continues to spread rapidly.
Rupee Rally becomes two months high supported by the inflow.
The domestic currency closed stronger at 74.04, up from Friday’s closing from 74.31 against the dollar – the highest since November 9.
Record records with reliance industries and other capital inflows are expected to keep the dollar under the check.
However, the bond market sees selling selling.
The results of 6.59% in the 10-year bond are the highest since January 31, 2020.
The 10-year freckle has been closed at 6.54% on Friday.
Sentiment in the bond market has changed after the RBI becomes a clean seller of bonds – the steps seen are intended to measure the steps to normalize the excess liquidity pumped in a pandemic.
Bond yields rose ahead of the December inflation rate, which was expected on Wednesday.
Dealers also have a negative view of inflation with global oil prices that tighten the concerns of supply limits due to geopolitical tensions in Libya and Kazakhstan.
In addition, the bonds rose due to the surge in US yields.
The decline in unemployment in the US is expected to encourage the Federal Reserve to raise interest rates earlier than expected.
In the domestic market, Sensex opened sharply stronger at 60,070 and soared to a height of 60,427 in intra-day trade.
Bank shares are one of the key enhancers.
During the day, there was rumors that the government might climb the limits of foreign investment at the public sector bank up to 74%.
Among the lenders, the SBI is increasing (2.5%) to anticipate better Q3 results.
HDFC (2.4%), Bank Box (2.3%), ICICI Bank (2.2%) and AXIS Bank (1.7%) are other significant enhancers.
However, rupees also took victims in several shares.
Wipro slumped 2.5% and was the biggest loser between Sensex shares.
Other losers in the index were Nestle India (-1.1%) and Cat Asia (0.6%).
Sun Pharma, Dr.
Reddy’s and Indusind Bank also closed red.
Bond yields in high pre-covid, defeating home loan interest rates
