Indian bonds modestly lower on profit booking; forthcoming GST bill boosts sentiments

The Indian government bonds traded modestly lower on Tuesday as investors cashed in profit ahead of state debts sale today. Also, speculation that the long-awaited GST bill is likely to be passed in the ongoing monsoon session of the Indian Parliament has boosted investor’s sentiments.

The yield on the benchmark 10-year bonds, which moves inversely to its price, rose ½ basis point to 7.252 percent, the yield on super-long 30-year bonds jumped 1 basis point to 7.531 percent and the short-term 3-year note yield up 1/2 basis point to 6.945 percent by 07:50 GMT.

According to Reuters, ten states will be raising at least 91.50 billion rupees through 5-year and 10-year bonds as against 120 billion rupees as per a schedule of the central bank. The newswire also cited that Federal Finance Minister Arun Jaitley is likely to meet finance ministers of all states today to discuss in detail the final structure of the proposed GST.

Moreover, investors also await the announcement of the new RBI chief, which is anticipated to happen in the ongoing monsoon session of the Parliament.

Meanwhile, the Sensex rose 0.06 percent or 17.55 points to 28,112.89 and Nifty-50 futures trading 0.47 percent higher or 40.40 points at 8,677.5 by 07:50 GMT.