businessfortnight

Mumbai: India’s benchmark 10-year bond yield rose to its highest in seven months on Friday after minutes of the central bank’s rate-setting committee meeting contained strong warnings on inflation, dimming hopes of a rate cut in the short term and sparking bets for a tightening move instead. The Reserve Bank of India had opted to leave the repo rate unchanged at 6.25 percent on April 6, and the minutes released on Thursday showed the six-member monetary policy committee had cited upside risks to inflation as the main reason for the decision. However, the comments were more hawkish than some traders expected. RBI Executive Director M. D. Patra had even favoured a pre-emptive 25-basis-points repo rate hike to contain inflationary pressures, although he finally joined the rest of the panel in voting 6-0 to keep rates unchanged. Also, comments by Chetan Ghate, an external member of the panel, were seen by traders as pointing to the prospects a rate hike sooner rather than later. A rate-ti...

Mumbai: The Indian rupee on Tuesday weakened against the US dollar, tracking losses in the Asian currencies markets. The rupee opened at 64.65 a dollar. At 9.15am, the home currency was trading at 64.65, down 0.14% from its Monday’s close of 64.56. The government will issue Index of Industrial Production (IIP) and Consumer Price Index-based (CPI) inflation for February and March, respectively, on Wednesday after 5.30pm. According to a Bloomberg poll, CPI will be at 3.96% in March from 3.65% a month ago, while IIP will be at 1.3% for February from 2.7% a month ago. The benchmark Sensex index rose 0.17% or 51.25 points to 29,626.99. So far this year, it has risen 12%. So far this year, the rupee has gained 5.2%, while foreign institutional investors have bought $6.91 billion and $6.19 billion from local equity and debt markets, respectively. The 10-year bond yield was trading at 6.883% compared to its previous close of 6.865%. Bond yields and prices move in opposite directions. Asian c...

After posting their best quarter in five years, rupee bond sales by Indian companies are set to retreat in the three months to June, if history is any guide. Issuance from businesses in Asia’s third largest economy is seen declining to as low as 1.13 trillion rupees ($17.4 billion) this quarter, according to IDFC Bank Ltd., down from 2.01 trillion rupees sold in the three months to March. A look at market behavior in the last five years shows sales tended to fall in the April-June period as companies draw up debt plans for the new fiscal year and refrain from big-size borrowings. “Companies have to refresh their borrowing plans and wait for internal board approvals before they start raising money again,” said Jayen Shah, Mumbai-based head of debt capital markets at IDFC Bank. “This is a seasonal phenomena, where rupee bond offerings gather momentum through the year with peak volumes in last quarter of the financial year. ” Bond issuance in the first quarter of 2017 surged as firms sou...