Yield chase drives MFs to state bonds

GOVERNMENT BOND YIELDS plunged this financial year, with the benchmark bond yield posting its steepest drop in five years, as humongous foreign inflows and the dovish tilt from global central banks fuelled investor appetite for local debt.

- DHARAMRAJ DHUTIA

The 10-year benchmark bond yield ended at 6.5823% on Friday, the last trading day of FY25.

The 10-year yield slid 15 basis points in March, the most in 10 months. That took its plunge this fiscal year to 47 bps, more than last fiscal's 26-bps drop and the steepest since FY20.

"Longer-duration bond yields could see a further fall going ahead and look lucrative," said Avnish Jain, Canara Robeco Mutual Fund's head of fixed income.