Informist mumbai

Government bond prices ended higher Monday after the Centre announced it would buy back INR 250 billion worth of gilts maturing in the financial year 2026-27 (Apr-Mar) through an auction Thursday. Firm expectations of a 25 basis-point rate cut by the Reserve Bank of India's Monetary Policy Committee Friday supported the rise in prices, dealers said. 

The 10-year benchmark 6.33%, 2035 gilt closed at INR 100.84, or 6.21% yield, compared with INR 100.72, or 6.23% yield, at close Friday. The most-traded bond, the 6.79%, 2034 gilt, closed at INR 103.65, or 6.27%, compared with INR 103.50, or 6.29%, Friday. 

"There was selling on Friday, which was mostly from people who were hoping for a 50 bps cut in June," a dealer at a state-owned bank said. "But with buyback auction and a 25 bps cut on Friday, which seems like a done deal, investor demand came in."