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Indian sovereign bond yields eased on Friday. The Reserve Bank of India cancelled a 7-year bond auction. This action led to a nearly seven basis point drop in the benchmark 10-year sovereign bond yield. Traders believe the cancellation signals the central bank's discomfort with higher yield bids. This development follows a period of rising yields since June.
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Indian equity indices closed lower on Friday, extending weekly declines but logging strong monthly gains. Investor caution stemmed from the US Federal Reserve's stance on interest rates and the US-India trade deal outcome. Analysts suggest current dips present buying opportunities ahead of potential rallies.
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Overseas funds injected 12,206 crore into Indian sovereign bonds in October, driven by a stable rupee and US Federal Reserve rate cuts. Foreign investors increased purchases on days of reported central bank currency intervention and after the Fed's policy move, boosting local debt returns.
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