Indian government bonds fell early on Friday, giving up part of the week's gains, as higher oil prices weighed on sentiment ahead of New Delhi's hefty debt sale. S.
68%, reducing the appeal of riskier emerging market debt. m.
IST, 2 basis points above Thursday's close. It was still set for its first weekly decline in five weeks.
Indian bonds buckle under oil spike, fresh debt saleIndian government bonds declined early Friday, reversing some weekly gains. Higher oil prices and global rate fears impacted investor sentiment before a large debt sale.
New Delhi plans to raise 320 billion rupees through bond auctions later today. The benchmark Brent crude contract saw a significant price increase since Tuesday.
The Reserve Bank of India maintained its repo rate, easing immediate inflation concerns. 36 billion) through a sale of bonds maturing in five years and 40 years later in the day."
-Iran tensions and soaring oil prices stoking fears of higher global rates," a private-bank trader said. 71, up over $4, or nearly 6% from $79 per barrel on Tuesday.
India is the world's third-largest importer and consumer of oil. Higher crude prices could increase its import bill, push up inflation and weigh on the rupee.
The Reserve Bank of India, however, eased immediate inflation concerns in a more dovish than expected policy announcement on Wednesday. The RBI kept the repo rate unchanged, but cut its inflation forecast for the year, promising sufficient liquidity for the banking system, prompting some analysts to push back their calls for rate hikes.
The central bank's rate stance and inflows into its foreign-currency scheme for non-residents continue to support short-end demand, traders said. RATESIndia's overnight index swap rates also marched higher due to global headwinds.
2850%.
