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Business Standard
05-08-2025
- Business
- Business Standard
Rally in long bonds nears end as key drivers weaken, says Axis AMC
The nearly 15-month rally in long-duration bonds is likely over unless a slowdown in economic growth triggers aggressive rate cuts or the bonds are included in new global indices, Axis AMC said in a note on Tuesday. 'The primary concern for long-duration bonds is no longer about spreads or yield levels — it lies in the deteriorating demand–supply dynamics, both structurally and tactically,' wrote Devang Shah, head – fixed income, Axis Mutual Fund. In the financial year (FY) 2026, demand for long-duration bonds (10 years and above) is estimated at ₹10.8 trillion, while supply is expected to touch nearly ₹12 trillion from central government and state development loans (SDLs) with maturities of 15–50 years, according to the note. Additionally, demand is likely to be impacted by revised Held to Maturity (HTM) guidelines for banks, increased equity allocation under the National Pension System (NPS), and restrictions on incremental foreign portfolio investor (FPI) participation in securities beyond 14 years under the Fully Accessible Route (FAR). Other drivers behind the rally have also weakened. The Reserve Bank of India's (RBI's) shift in policy stance signals that aggressive rate cuts are unlikely, while the scope for further fiscal consolidation — a recent market support — is also approaching its limits, the note said. Going by past trends, any significant decline in yields of longer-dated bonds from current levels is unlikely. 'Over the longer term, it is observed that the yields do not fall below 6.75 per cent in the 30-year bonds,' Shah stated. 'Investors should consider shifting to short-duration or accrual strategies. The steepening yield curve favours 2–5-year corporate bonds, which offer better risk-adjusted returns,' he added.
Business Standard
29-07-2025
- Business
- Business Standard
Early data from FY26 indicate potential for a turnaround in foreign investment flows says DEA
Department of Economic Affairs or DEA stated in a latest monthly update that in the face of ongoing global uncertainty, India achieved a capital and financial account surplus of USD 21.7 billion in FY25 on account of higher NRI deposits (USD 16.2 billion) and external commercial borrowings (USD 18.4 billion). However, during FY25, both net Foreign Direct Investment (FDI) and net Foreign Portfolio Investment (FPI) inflows declined vis-?-vis FY24, primarily influenced by cautious global investment trends shaped by geopolitical tensions and tighter financial conditions worldwide. Early data from FY26 indicate the potential for a turnaround in foreign investment flows. flows. Gross FDI inflows grew by 5 per cent (YoY) in April-May FY26 and stood at USD 15.9 billion. There are notable improvements in equity inflows and a lower incidence of repatriations, signalling fresh confidence in India's long-term growth prospects, particularly in sectors like digital infrastructure and manufacturing. On the portfolio investment side, net FPI amounted to USD 0.4 billion during Q1 FY26. While the debt segment witnessed outflows of USD 4.1 billion, these were offset by inflows of USD 4.5 billion in the equity segment. This suggests that global investors are selectively re-entering Indian equities, driven by expectations of stable inflation, credible fiscal consolidation, and ongoing growth in domestic demand. The government noted that during July 2024 to mid-July 2025, there has been a cumulative inflow of USD 7.5 billion through the Fully Accessible Route (FAR).
Economic Times
07-07-2025
- Business
- Economic Times
India bonds steady as traders await fresh triggers
Indian government bonds barely moved in early deals on Monday, as traders stayed pat in the absence of any fresh domestic and global cues. ADVERTISEMENT The yield on the benchmark 10-year bond was at 6.2926% as of 10:10 a.m. IST compared with Friday's close of 6.2947%. Trading volumes were muted at the start of the week, but investors will keep a watch on U.S. Treasury peers, which inched lower in Asian hours. The 10-year U.S. yield was at 4.3319%, slightly lower following Thursday's rise, after data showed the U.S. created more jobs than expected in June. Brent crude futures lost 0.72% to $67.86 per barrel. "Foreign investors have been buying Indian bonds lately, so we are closely watching that for further direction," a trader at a primary dealership said. ADVERTISEMENT "Public sector banks have been selling for some time, so someone has to absorb that, and if foreign investors continue purchasing, we can see some rally in bonds." Still, bonds should trade in a range, with the 10-year yield bound between 6.28%-6.32%, the trader added. ADVERTISEMENT Last week, foreign investors stepped up purchases of Indian government bonds under the Fully Accessible Route (FAR). The investors net bought 87 billion rupees ($1.02 billion) of bonds under FAR during the period, CCIL data showed. ADVERTISEMENT Meanwhile, state-run banks net sold bonds worth about 143 billion rupees last week. RATES ADVERTISEMENT India's overnight index swap (OIS) rates were little changed in early deals as trading volumes remained muted. The one-year OIS rate and the two-year OIS rate were not traded yet, while the liquid five-year swap inched lower at 5.67%. (You can now subscribe to our ETMarkets WhatsApp channel)
Business Recorder
07-07-2025
- Business
- Business Recorder
India bonds steady as traders await fresh triggers
MUMBAI: Indian government bonds barely moved in early deals on Monday, as traders stayed pat in the absence of any fresh domestic and global cues. The yield on the benchmark 10-year bond was at 6.2926% as of 10:10 a.m. IST compared with Friday's close of 6.2947%. Trading volumes were muted at the start of the week, but investors will keep a watch on US Treasury peers, which inched lower in Asian hours. The 10-year US yield was at 4.3319%, slightly lower following Thursday's rise, after data showed the US created more jobs than expected in June. Brent crude futures lost 0.72% to $67.86 per barrel. 'Foreign investors have been buying Indian bonds lately, so we are closely watching that for further direction,' a trader at a primary dealership said. 'Public sector banks have been selling for some time, so someone has to absorb that, and if foreign investors continue purchasing, we can see some rally in bonds.' Still, bonds should trade in a range, with the 10-year yield bound between 6.28%-6.32%, the trader added. India bond yields rise tracking US Treasuries, end flattish for week Last week, foreign investors stepped up purchases of Indian government bonds under the Fully Accessible Route (FAR). The investors net bought 87 billion rupees ($1.02 billion) of bonds under FAR during the period, CCIL data showed. Meanwhile, state-run banks net sold bonds worth about 143 billion rupees last week.
Time of India
07-07-2025
- Business
- Time of India
India bonds steady as traders await fresh triggers
Indian government bonds barely moved in early deals on Monday, as traders stayed pat in the absence of any fresh domestic and global cues. The yield on the benchmark 10-year bond was at 6.2926% as of 10:10 a.m. IST compared with Friday's close of 6.2947%. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Contribute ToGau Seva At Hare Krishna Mandir Hare krishna Mandir Donate Now Undo Trading volumes were muted at the start of the week, but investors will keep a watch on U.S. Treasury peers, which inched lower in Asian hours. The 10-year U.S. yield was at 4.3319%, slightly lower following Thursday's rise, after data showed the U.S. created more jobs than expected in June. Brent crude futures lost 0.72% to $67.86 per barrel. Live Events " Foreign investors have been buying Indian bonds lately, so we are closely watching that for further direction," a trader at a primary dealership said. " Public sector banks have been selling for some time, so someone has to absorb that, and if foreign investors continue purchasing, we can see some rally in bonds." Still, bonds should trade in a range, with the 10-year yield bound between 6.28%-6.32%, the trader added. Last week, foreign investors stepped up purchases of Indian government bonds under the Fully Accessible Route (FAR). The investors net bought 87 billion rupees ($1.02 billion) of bonds under FAR during the period, CCIL data showed. Meanwhile, state-run banks net sold bonds worth about 143 billion rupees last week. RATES India's overnight index swap (OIS) rates were little changed in early deals as trading volumes remained muted. The one-year OIS rate and the two-year OIS rate were not traded yet, while the liquid five-year swap inched lower at 5.67%.
