Indian Gilt prices drop ahead of auction
Published May 24th, 2007
Gilt prices today (May 24, 2007) dropped following heavy selling ahead of auction.
The Indian gilt remained under the pressure of heavy selling as investors preferred to raise cash in advance of bond auction.
The apex bank will sell `7.38% Government Stock 2015` for Rs 50 billion and `8.35% Government Stock 2022` for Rs 30 billion on May 25.
Moreover, improved cash in the banking system has triggered the speculation of MSS bond auction in coming weeks. Today, RBI len only Rs 57.55 billion via its 1-day repos to cash shortage units, which was over Rs 100 billion by starting days of the current week.
Improved cash supplies and inflation data due tomorrow kept the traders on the sidelines. Prices, thus, moved down. Inversely, gilt yields moved up.
The 10-year benchmark bond closed at 8.15%, higher than 8.13% on the previous day.
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