Government securities (G-Secs) rallied on Wednesday in the run up to the financial year end as banks stepped up purchases to bring down yields and improve valuation of their investment portfolio.

Price of the 10-year benchmark G-Sec (coupon rate: 6.54 per cent) closed up 26 paise at ₹98.26 (previous close: ₹98). Yield of this paper ended about 4 basis points down at 6.7841 per cent (6.8214 per cent).

Bond price and yields are inversely co-related and move in opposite directions.

Also read

Bond market players want RBI to divide Govt borrowing equally between two halves of FY23

Price of the 9-year G-Sec (coupon rate: 6.10 per cent) closed up about 22 paise at ₹95.1225 (previous close: ₹94.905). Yield of this paper ended about 3 basis points down at 6.8158 per cent (6.8489 per cent).

G-Sec yields softened amid thin trading volumes, a bond dealer with private sector bank said.

The trader observed that there has been no change in the market fundamentals for G-Sec yields to go down (and prices to go up). He emphasised that the yields went down solely because Banks started buying.

Meanwhile, the RBI has announced the dates of the six bi-monthly meetings that the Monetary Policy Committee (MPC) will hold in FY23. The first of the three-day meetings will kick-off on April 6.

Related Topics