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Mint
3 days ago
- Business
- Mint
India bond yields seen steady; may breach 6.50% amid sour mood
MUMBAI, Aug 13 (Reuters) - Indian government bond yields are likely to open steady on Wednesday, with the benchmark 10-year yield seen testing the key 6.50% mark amid a sour mood, following a sharp selloff fuelled by rising fiscal pressure and higher debt-supply concerns. The benchmark 10-year bond yield will likely trade between 6.45% to 6.52%, a trader at a primary dealership said. It closed at 6.4920% on Tuesday, highest since April 3. The yield will test a key technical level of 6.50% during the day, traders said, adding that if breached, the yields could climb further. India's net direct tax collections dropped 4% year-on-year to 6.64 trillion rupees ($75.82 billion) from April 1-August 11, stoking fears that New Delhi may borrow more to fund a fiscal stimulus as U.S. tariffs threaten growth. "There seems to be a supply-demand mismatch playing out, and a possibility of fiscal slippage, so there are few takers in the market," a trader at an AMC said. Traders are now awaiting clarity from the Reserve Bank of India on whether it is comfortable with the current yield levels. Meanwhile, New Delhi will raise 210 billion rupees through the sale of 91-day, 182-day and 364-day T-bills later in the day. The demand for Treasury bills will be tested during the day, traders warned. India's overnight index swap (OIS) rates are expected to open little changed, while there will likely be some receiving bias as some traders are pricing in a rate cut due to mounting growth concerns amid tariffs. The one-year OIS rate ended at 5.51% on Tuesday and the two-year OIS rate was at 5.455%. The liquid five-year OIS rate settled at 5.6725%. ** Benchmark Brent crude futures were at $66.05 per barrel, little change compared to Tuesday ** Ten-year U.S. Treasury yield was at 4.2907%; two-year yield at 3.7371% ($1 = 87.5780 Indian rupees) (Reporting by Khushi Malhotra; Editing by Sumana Nandy)
Mint
28-07-2025
- Business
- Mint
Indias Kotak Mahindra Bank slumps as earnings spark asset quality concerns
(Reuters) -Shares of India's Kotak Mahindra Bank were on track for their worst day in more than a year on Monday, as a quarterly earnings miss sparked concerns of worsening asset quality. The stock fell 6.4% to 1,988.60 rupees, the lowest since mid-March and was the worst performer on India's benchmark Nifty 50 index, which slipped 0.1%. Kotak was also the top laggard on the bank and private bank indexes. At least eight analysts slashed their price targets on the "buy"-rated stock after the private lender missed quarterly profit estimates on higher provisions for potential bad loans. Asset quality pain continued for Kotak and stress in the retail commercial vehicles segment is expected to rise further, analysts at Ambit said. "Considering such volatility, and limited availability of buffer provisions, we expect fiscal 2026 credit costs to remain elevated," they said. Kotak, like several Indian banks, has been grappling with rising bad loans in the unsecured loan segment. Its gross non-performing assets ratio worsened to 1.48% of total loans at the end of June from 1.39% a year earlier. Its net interest margin, a key gauge of profitability, dropped to 4.65% from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's interest rate cuts. Analysts at Emkay Global expect the margin to contract further in the second quarter, with a gradual recovery expected from the third quarter. When interest rates are lowered, banks typically pass on the benefits to borrowers early, followed by lower deposit rates, which can temporarily squeeze margins. Earlier this month, peer Axis Bank also reported disappointing results, which fanned concerns of declining asset quality. The session's losses have trimmed Kotak's year-to-date gains to 11%, versus a 10% climb in the private banks index. (Reporting by Kashish Tandon in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala)
Mint
18-07-2025
- Business
- Mint
Pause in dollar rally offers relief to rupee after 86 breach
MUMBAI, July 18 (Reuters) - The Indian rupee is set to open higher on Friday, tracking a broader recovery in Asian peers and supported by a pause in the U.S. dollar index's near-term uptrend. The 1-month non-deliverable forward indicated an open in the 86.00-86.02 range versus 86.0750 on Thursday, marking the rupee's first sub-86 finish in nearly a month. "Asia will help (the rupee) at the open. However, I'd fade any downside (on USD/INR)," a currency trader at a bank said. "Positioning and risk-reward favour upside, and this looks (like a) buy-on-dips market right now." The dollar index fell about 0.2% in Asia to 98.40, helping most Asian currencies climb higher. The dollar index had rallied on Thursday, approaching the 99 mark, after robust U.S. data spurred expectations that the Federal Reserve will be in no rush to resume rate cuts. Upbeat U.S. retail sales in June pointed to a pickup in economic activity, while job claims fell to a three-month low, reinforcing signs of steady labour market strength. U.S. economic data released on Thursday "continues to signal resilience," MUFG Bank said, while noting the muted reaction in U.S. Treasury yields. Markets were largely unchanged about the Fed outlook, with no major shift in pricing for a September rate cut or the cumulative rate cuts expected in 2025. Despite the dip in the dollar index on Friday, the gauge is up 0.6% this week after last week's near 1% rally. Markets continue to hold net short positions on the U.S. dollar, and an unwinding of those short dollar positions could provide support for the U.S. currency, MUFG Bank noted. ** One-month non-deliverable rupee forward at 86.08; onshore one-month forward premium at 10 paise ** Dollar index down at 98.41 ** Brent crude futures down 0.1% at $69.5 per barrel ** Ten-year U.S. note yield at 4.44 ** As per NSDL data, foreign investors sold a net $121.3 million worth of Indian shares on July 16 ** NSDL data shows foreign investors bought a net $3.5 million worth of Indian bonds on July 16 (Reporting by Nimesh Vora; Editing by Sumana Nandy)
Mint
18-07-2025
- Business
- Mint
India bonds seen steady ahead of RBIs debt sale, liquidity moves
MUMBAI, July 18 (Reuters) - Indian government bond yields are expected to be largely unchanged as traders await fresh debt supply through the weekly auction, while the central bank's larger-than-expected quantum for its liquidity withdrawal operation keeps investors cautious. The yield on the benchmark 10-year bond is likely to trade between 6.30% and 6.33%, a trader at a private bank said, after closing at 6.3010% on Thursday. The five-year 6.75% 2029 bond ended at 5.9704%. New Delhi will sell bonds worth 270 billion rupees ($3.14 billion), which includes a new five-year paper and a 30-year bond. The cutoff for the five-year bond would provide insight into the appetite for shorter-duration papers. "There was some relief rally yesterday as foreign banks entered after rate cut bets strengthened," the trader said. "But we could be back to rangebound trades today due to debt sale and higher quantum of reverse repo from the Reserve Bank of India (RBI)." The RBI will conduct a seven-day variable rate reverse repo (VRRR) auction for 2 trillion rupees against a similar maturing amount. Market participants, however, were anticipating a lower amount as outflows for goods and services tax would start from Friday. Overnight and short-term rates have risen since the central bank started the VRRRs three weeks ago. Meanwhile, bets for interest rate cuts have started rising after retail inflation slipped to 2.10% in June, the slowest pace in more than six years, down from 2.82% in May. An estimated drop in inflation to a record low in July is prompting calls for at least one more rate cut this year. RATES India's shorter duration overnight index swap rates (OIS) are expected to see paying pressure due to aggressive cash withdrawal from the RBI. The one-year OIS rate ended at 5.51% and the two-year OIS rate at 5.48%. The liquid five-year finished at 5.7250%. ** Benchmark Brent crude futures little changed at $69.50 per barrel after rising 1.5% on Thursday ** Ten-year U.S. Treasury yield at 4.4443%; two-year yield at 3.9170% ** India to auction sovereign bonds worth 270 billion rupees ** RBI to set underwriting fees for sovereign bond auction worth 270 billion rupees ** RBI to conduct seven-day variable rate reverse repo auction worth 2 trillion rupees ($1 = 85.9940 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Sumana Nandy)
Mint
30-06-2025
- Business
- Mint
Australian shares head for sixth straight half-yearly rise
June 30 (Reuters) - Australian shares were headed for their sixth straight half-yearly rise on Monday, driven by easing geopolitical and trade tensions and hopes of rate cuts by the local central bank. The S&P/ASX 200 index rose 0.2% to 8,530.60 points by 0023 GMT. The benchmark was on track to rise 4.5% for the first half of 2025. Domestic equities recouped from a trough hit in early April as easing U.S.-China trade tensions and an Israel-Iran ceasefire boosted risk appetite. Gold stocks were poised to soar more than 35% in the first six months of 2025, in what could be its best half-year since 2016's first half, as geopolitical tensions and tariff worries drove safe-haven demand. However, the sub-index fell 1% on the day as bullion prices eased. Energy stocks, which fell 0.7%, were highly volatile in the half-year as the Israel-Iran conflict fuelled oil supply concerns. The sub-index was largely unchanged for the half year. Meanwhile, miners retreated 1.3% after surging more than 2% on Friday. Further leading the benchmark higher were prospects of rate cuts by the Reserve Bank of Australia (RBA) as domestic inflation eased. Swaps implied a 92% probability that the RBA would cut rates by a quarter-point at its upcoming policy meeting on July 8. Local investors awaited the retail sales data for May due on Wednesday for further clues into rate cuts. Financials rose 0.7%, with the "Big Four" gaining between 0.3% and 0.8%. The sub-index was on track to jump more than 10% for the half-year. In company news, Star Entertainment said it received a notice from Hong Kong's Far East Consortium International and Chow Tai Fook Enterprises to terminate the deal to sell its 50% stake in its Queen's Wharf project in Brisbane. However, shares rose 1.7%. New Zealand's benchmark S&P/NZX 50 index was largely unchanged at 12,580.56 and was set for its worst half-year since the first half of 2022. (Reporting by John Biju in Bengaluru; Editing by Sumana Nandy)
