Indian bonds gain ahead of 10-year gilt auction and Q1 GDP data

The Indian bonds gained Wednesday as investors demand boosted, ahead of the benchmark 10-year gilts auction, which is scheduled to be held on Friday.

The yield on the benchmark 10-year bonds, which moves inversely to its price, fell 1 basis point to 7.101 percent and the 5-year note yield slid more than 1 basis point to 7.011 percent by 07:00 GMT.

According to Reuters, the Reserve Bank of India will auction four bonds for 140 billion rupees this week including 80 billion rupees of the benchmark 10-year paper, which will take its issuance to 870 billion rupees.

Moreover, investors will remain keen to focus on the joining of hawkish Urjit Patel as the new governor of the Reserve Bank of India, with effect from September 4. Urijit Patel, current deputy governor, was expected as the only hawkish candidate for Governor chair. As Chairman of the Urjit Patel committee, he advised moving to a consumer inflation target of 4 – 2 percent and towards positive real interest rates.

Also, traders await first-quarter gross domestic product (GDP) figure, which is scheduled to be released on Wednesday at 12:00 GMT.

Meanwhile, the Sensex rose 0.44 percent or 123.42 points to 28,466.43 and Nifty-50 futures traded 0.56 percent higher or 48.95 points at 8,852 by 07:20 GMT.