Bond yield jumps after first G-SAP public sale

The benchmark 10-year bond yield rose by 11 foundation factors to six.12 per cent with the Reserve Bank of India setting increased than anticipated cut-off yields at its first authorities securities acquisition programme (G-SAP) public sale and inflation inching upwards. However, the rupee rose 74.93 in opposition to the greenback and the Sensex rallied 260 factors to 48,803.68. The NSE Nifty rose by 77 factors to 14,581.45.
The RBI bought Rs 25,000 crore value of bonds below G-SAP, below which it has dedicated to purchasing Rs 1 lakh crore of presidency paper between April and June to assist the absorption of the Centre’s large Rs 12.06 lakh crore borrowing in FY22. The cut-off yield on 6.79 per cent securities for 2027 was 6.1303 per cent.
On the Sensex rally, Vinod Nair, head of analysis, Geojit Financial Services, stated, “Market is becoming more cautious as states are increasing restrictions due to the havoc created by the virus.”

Meanwhile, a fall in 10-year US Treasury yield to 1.5496 per cent and powerful US financial information fuelled a rally in shares intra-day, with the Dow Jones — up 0.85 per cent — and the S&P 500 — up 0.96 per cent — each hitting new highs. Oil costs hit a close to one-month excessive amid increased demand forecasts from the IEA.
With inputs from Reuters