Bond yields reverse early gains on profit booking

THE GOVERNMENT BOND market initially responded positively on Friday to the policy rate cut by the Reserve Bank of India, but yields rose afterwards due to profit booking by some market participants.

- CHRISTINA TITUS

The yield on the 10-year benchmark bond fell to 6.45% before settling at 6.49%, down 2 basis points (bps) from the previous close.

The initial rally happened because a part of the market was not expecting a rate cut, said market participants. However, the uncertainty of future rate cuts dampened sentiment and prompted profit booking mostly by mutual funds, they added.