Indian bond bias stays positive, debt auction demand in focus

Business Recorder reported that Indian government bonds held firm in early trade on Friday, with the benchmark 10-year yield staying above 6.75% as investors awaited a weekly debt auction for new cues. The yield on the 6.94% 2036 bond stood at 6.7511% at 10:00 a.m. IST, slightly lower than Thursday's close of 6.7582%. A lower yield means bond prices have climbed.

Later on Friday, New Delhi is set to raise 320 billion rupees, or $3.35 billion, through a bond sale featuring two fresh securities with three-year and seven-year maturities. A trader said bulls dominated the previous session, but wondered whether there would be enough buyers to push the 10-year yield above 6.75%.

Oil prices softened in Asian trading, with Brent falling under $87 a barrel, while US crude inventories posted their biggest weekly gain since January 2023 according to the US Energy Information Administration. Business Recorder noted that cheaper crude benefits India, the world's third-largest importer of crude, because lower import bills can ease inflation and strengthen the fiscal outlook. American Treasury yields slipped too, with the 10-year hovering around 4.65%, after July producer price figures pointed to wholesale inflation staying under control and trimmed wagers on a September rate increase.