Bond yields off session highs on short-covering; rupee near 1-month low – Times of India

MUMBAI: The rupee dropped on Monday to its lowest in practically a month in opposition to the greenback, monitoring losses within the inventory market and weighed by sharp positive factors in international crude oil costs, whereas bond yields pulled again from session highs on short-covering.
Oil costs climbed to their highest in practically three weeks as fears over tight international provide grew, with the deepening disaster in Ukraine elevating the prospect of heavier sanctions by the West on high exporter Russia.
India imports greater than two-thirds of its oil necessities and rising costs are likely to push up imported inflation and widen the nation’s commerce and present account deficits.
The partially convertible rupee was buying and selling at 76.28/29 per greenback versus its shut of 76.1750 on Wednesday. Earlier within the session, it touched a low of 76.43, its weakest since March 22.
Indian monetary markets have been closed on Thursday and Friday for holidays.
The benchmark 10-year bond yield was buying and selling down 3 foundation level at 7.18% by 0828 GMT, after earlier rising to a excessive of seven.26%.
“Shares are additionally down fairly a bit, so we noticed some consolidation in bonds after the weak open. However with weekly provide, yields haven’t got a lot draw back from right here until the RBI (Reserve Financial institution of India) does one thing,” mentioned a senior dealer with a overseas financial institution.
Home indices touched three-week lows, hit by losses in IT shares after Infosys crashed 9% on lacking quarterly revenue estimates, whereas inflation issues additionally weighed on sentiment.
Annual wholesale inflation price accelerated to 14.55% in March, information confirmed, finishing a yr in double-digit territory as companies grapple with rising enter prices and move on increased costs to shoppers.
“Provide shortages and value will increase in a variety of enter items because of the Russia-Ukraine battle will maintain home inflation excessive within the coming months, setting the stage for front-loaded financial coverage tightening by the central financial institution,” mentioned Rahul Bajoria, chief economist at Barclays.

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