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Indian bonds gain on easing Brexit worries

The Indian government bonds gained Tuesday as Brexit fears started to fade, boosting global risk sentiments.

The yield on the benchmark 10-year note, which moves inversely to its price fell nearly 1 basis point to 7.487 percent and the yield on super-long 30-year bonds dipped more than 2 basis points to 7.848 percent by 07:00 GMT.

The recent polls in the United Kingdom in run up to the June 23 Brexit referendum indicate that the percentage of citizens in favour of "Remain" the European Union (EU) has outnumbered those who want to "Leave", easing the possibility that Britain might leave the EU after 43 years of membership in the bloc.

According to the NatCen poll results on the United Kingdom referendum campaign, 53 percent would vote to 'Remain' in the European Union, while, 47 percent would vote to 'Leave'. Similarly, the ORB/Daily Telegraph poll results on the United Kingdom referendum campaign, 53 percent would vote to 'Remain' in the European Union, while, 46 percent would vote to 'Leave'.

On Saturday, the Reserve Bank of India’s Governor Raghuram Rajan told the RBI staff that he will return to academia after his term with the RBI ends on 4th September. Rajan, a former chief economist of the International Monetary Fund who is on leave from University of Chicago, took charge as the twenty-third Governor of the RBI in September 2013 after the rupee sank to a record low against the U.S. dollar, as foreign investors took hefty sums off emerging markets such as India at the first indication of a reversal in easy U.S. monetary policy.

Meanwhile, Rajan also warned against changing ‘course’ at a time when India is adjusting from higher to lower inflation levels, saying the best way for a central bank to ensure sustainable growth is to keep demand close to potential supply and by ensuring low inflation.

The government will shortly announce a successor to Rajan, Finance Minister Arun Jaitley said on Saturday. The focus will soon shift to who will succeed Rajan as the central bank’s next chief.

Meanwhile, the Sensex fell 0.31 percent or 82 points to 26,784.89 and Nifty-50 futures trading down 0.30 percent or 24.90 points at 8,226.25 by 07:00 GMT.

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