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Bonds surge as Indian rupee rally spurs bets of higher inflows

LiveMint logoLiveMint 27-03-2017 Subhadip Sircar

Mumbai: Indian sovereign bonds climbed, pushing the benchmark 10-year yield down by the most since November, on speculation a stronger currency will lure more foreign inflows into the nation’s debt market.

The rupee rallied Monday, after capping a fifth straight weekly advance on Friday that was the longest stretch of such wins since October 2012.

Overseas holdings of local-currency government and corporate notes jumped by Rs13,570 crore ($2.1 billion) last week, the most since October 2015, data from the National Securities Depository show.

“The presence of foreigners is mainly guiding the moves in the bond market,” said Ajay Manglunia, Mumbai-based head of fixed income at Edelweiss Financial Services. “Foreign investors are quite bullish on bonds given the attractive yield and the rupee’s appreciation.”

Bond yields slipped across Asia on Monday, with regional currencies advancing, after US President Donald Trump’s failure to pass his health-care bill cast doubts on his ability to push through other fiscal and tax plans. Bloomberg

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