Date:09/07/2008 URL: http://www.thehindubusinessline.com/2008/07/09/stories/2008070951170600.htm

Back Bond prices fall by Re 1

Mumbai, July 8

Bond prices fell by almost a rupee on fears of political instability, as the Left announced it was pulling out of the UPA Government. According to bond dealers, inflation in double digits and tight liquidity following the new CRR rates are the primary reasons for bond yields moving up. A bond dealer with a public sector bank said that yields are bound to move up further which will result in more marked-to-market losses for banks. The total volumes on the order matching sys tem were at Rs 3,915 crore (Rs 1,990 crore). The 8.24 per cent-10 year-2018 paper opened at Rs 94.19 (9.15 per cent YTM) and touched a low of Rs 93 (9.34 per cent YTM) during day trade. It closed at Rs 93.31 (9.29 per cent YTM), against the previous close of Rs 94.08 (9.16 per cent). The 8.28 per cent 24-year -2032 paper opened at Rs 84.7 (9.97 per cent YTM) and touched a low of Rs 83.8 (10.09 per cent YTM). It closed at Rs 84.25 (10.03 per cent YTM), against the previous close of Rs 84.5 (10 per cent YTM).

— Our Bureau