Yield on 10-year benchmark government securities is likely to range bound with a possibility of softening in the near-term on the back of rate cut expectations, experts say.
The 10-year benchmark G-sec closed at 8.24 per cent on Friday, which is five basis points higher than the previous session close of 8.19 per cent after the GDP data for Q1 was released along with the fiscal deficit data.
‘Bond yield took cue from the GDP data and fiscal deficit on Friday. However, rate cut expectation will drive the yield in the near future,’ a treasury official of a mid-size public sector bank said.
He also said that yields may hover in the 8.25 per cent level in the near future or even soften on the back of a possible rate cut in the next policy.
Referring to the impact of the Q1 GDP figure of 5.5 per cent and fiscal deficit data for first four months, he said that fiscal deficit would be a key factor to watch for in the near-term along with overall liquidity situation.
Fiscal deficit in the first four months of 2012-13 stood at 51.5 per cent of the budget estimates – slightly better compared to 55.4 per cent in the same period a year ago – according to Controller General of Accounts (CGA) data released on Friday.
In absolute terms, the fiscal deficit – the gap between expenditure and revenue collection – was Rs 2.64 lakh in the the first four months through July 2012, CGA data showed.
The 10-year benchmark G-sec closed at 8.24 per cent on Friday, which is five basis points higher than the previous session close of 8.19 per cent after the GDP data for Q1 was released along with the fiscal deficit data.
‘Bond yield took cue from the GDP data and fiscal deficit on Friday. However, rate cut expectation will drive the yield in the near future,’ a treasury official of a mid-size public sector bank said.
He also said that yields may hover in the 8.25 per cent level in the near future or even soften on the back of a possible rate cut in the next policy.
Referring to the impact of the Q1 GDP figure of 5.5 per cent and fiscal deficit data for first four months, he said that fiscal deficit would be a key factor to watch for in the near-term along with overall liquidity situation.
Fiscal deficit in the first four months of 2012-13 stood at 51.5 per cent of the budget estimates – slightly better compared to 55.4 per cent in the same period a year ago – according to Controller General of Accounts (CGA) data released on Friday.
In absolute terms, the fiscal deficit – the gap between expenditure and revenue collection – was Rs 2.64 lakh in the the first four months through July 2012, CGA data showed.