Mumbai: Friday is a busy day for good bonds and stock markets with decisions by the Supreme Court and the RBI affecting investor sentiment.
In the government bond market, after the RBI increased its retail inflation estimates for this year to 5.7% from 5.1%, Gilt witnessed sales with the results of benchmarks in 10-year paper soaring to 6.26%, one and a half – as high as years, from 6.2% on Thursday.
The central bank also allows banks to park surplus liquidity under the ratio of repo variables (VRRR), increasing from RS 2 Lakh Crore to RS 4 Lakh Crore at the end of September, it is seen as a tentative step for the normalization of the excess of the liquidity situation in the banking situation.
VRRR is a process where banks can park their additional funds for 14 days or more with the RBI.
According to Kumaresh Ramakrishnan, CIO, fixed income, Indian PGIM Mutual Fund, its policy “‘supports” and the comments are quite dovish.
“But the sound is less unanimous for accommodating attitude, a higher number of VRRR and an increase in inflation estimates, signaling some concerns that arise in the central bank in the margin,” he said.
In the afternoon, RBI also announced that it had canceled the weekly auction of RS 26,000 Crore from G-S-SEC under the government loan program for current fiscal.
Bond dealers say that the central bank is not convenient with the demand for buyers of bonds for higher results (meaning the price is lower) for G-SEC and therefore cancel the auction.
In Dalal Street, RIL, along with banking and financial stocks mostly lead slides.
RIL closes 2.1% lower behind the disadvantageous SC assessment at RS 24.713-Crore Deal to buy a future group retail business.
Along with RIL, all shares belonging to the future group witnessed strong selling and most closed on lower circuits.
Led by RIL, Sensex closed 215 points lower at 54,278 points, while on NSE, Nifty closed 56 points lower at 16,238.
Trading days on the road also witnessed a strong purchase in the idea of Vodafone with the closure of a 20% stock up at Rs 7.1 in BSE.
The rally came after Lok Sabha revoked the controversial tax law that led to several cases of the court globally.
Bonds, Shear Stocks on RBI, SC Move
