By -
Aug 28, 2014
India’s 10-year government bonds
fell this week before a report forecast to show the economy grew
at the fastest pace in nine quarters in the April-June period,
easing pressure on the central bank to cut rates.
Gross domestic product expanded 5.5 percent in India’s fiscal first quarter, up from 4.6 percent in the previous three months and the most since March 2012, according to the median estimate in a Bloomberg survey before data due tomorrow. Overseas investors’ holdings of government debt has reached about 99 percent of the $25 billion limit, according to data provided by the National Securities Depository Ltd.
“Though growth acceleration is good for the nation, in the short term the situation may not be great for the markets as there will be upward pressure on rates,” said Killol Pandya, a senior fixed-income fund manager at LIC Nomura in Mumbai. Investors will welcome any decision to increase the foreign investment limit, he said.
The yield on the 8.4 percent notes due July 2024 rose five basis points, or 0.05 percentage point, this week to 8.56 percent as of 10:31 a.m. in Mumbai, according to the central bank’s trading system. The rate was little changed today ahead of a 120 billion rupee ($2 billion) bond sale. Financial markets in Mumbai are closed tomorrow for a holiday.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, were unchanged at 8.46 percent, data compiled by Bloomberg show.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
Gross domestic product expanded 5.5 percent in India’s fiscal first quarter, up from 4.6 percent in the previous three months and the most since March 2012, according to the median estimate in a Bloomberg survey before data due tomorrow. Overseas investors’ holdings of government debt has reached about 99 percent of the $25 billion limit, according to data provided by the National Securities Depository Ltd.
“Though growth acceleration is good for the nation, in the short term the situation may not be great for the markets as there will be upward pressure on rates,” said Killol Pandya, a senior fixed-income fund manager at LIC Nomura in Mumbai. Investors will welcome any decision to increase the foreign investment limit, he said.
The yield on the 8.4 percent notes due July 2024 rose five basis points, or 0.05 percentage point, this week to 8.56 percent as of 10:31 a.m. in Mumbai, according to the central bank’s trading system. The rate was little changed today ahead of a 120 billion rupee ($2 billion) bond sale. Financial markets in Mumbai are closed tomorrow for a holiday.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, were unchanged at 8.46 percent, data compiled by Bloomberg show.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
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