Bond mkt sees best day in 2 months

G-sec yields slump 10-yr bond yield fell by 10 bps intraday but gave up some gains

- ANJALI KUMARI

Government bond prices surged on Thursday after global rating agency S&P upgraded India's sovereign credit rating from BBB-to BBB, recognising the government's commitment to fiscal discipline alongside its strong infrastructure push.

The yield on the benchmark 10year government bond fell by up to 10 basis points (bps) during the day but gave up some gains towards the end due to profit booking. Bond prices and yields are inversely related. The rupee, which deprecinated 0.14 per cent on Thursday to close at 87.56 against the dollar 1 compared to 87.44 on Wednesday, - trimmed some losses after the rating upgrade announcement.

The benchmark yield fell to 6.38 per cent before settling at 6.40 per cent for the day, versus Wedneso day's closing of 6.48 per cent. This is 7 the largest single-day drop in yields e in two months.

“Now that the yield has fallen below the 6.40 per centmark, wemight see 6.35 per cent soon,” said a dealer at a primary dealership.