Prices of government bonds ended sharply lower Thursday as traders made room for fresh supply at the INR 300-billion gilts auction Friday. Traders took profits after the rise in prices Wednesday, dealers said. Sentiment soured slightly after the minutes of the Reserve Bank of India's Monetary Policy Committee's Sept. 29-Oct. 1 meeting failed to cement bets of a rate cut in December, dealers said. 

The disparity among the members' views weighed on the sentiment. Indications of India and the US nearing a trade deal also added to the fall in prices, since tariffs on Indian exports to the US had accelerated bets of a rate cut owing to the likely hit on GDP growth, dealers said. 

The 10-year benchmark 6.33%, 2035 gilt closed at INR 98.80, or a yield of 6.50%, as against INR 98.94, or 6.48% yield, Wednesday.  The 6.50% yield on the 10-year benchmark bond is the 200-day moving average, and a key technical level, dealers said.                         

-Informist