Indian government bond prices strengthened on Thursday, tracking the fall in US Treasury yields, which fell after US inflation data was lower than expected. The supportive domestic inflation data further aided the bond market.
The yield on the benchmark 10-year government bond settled at 6.99 per cent on Thursday, against 7.01 per cent on Wednesday. Bond yields and bond prices are inversely correlated.
“Our market is acting like a derivative to the US yields,” said a dealer at a state-owned bank. “The US Federal Reserve meeting outcome was hawkish, but the market is only focusing on the data,” he added.
The 10-year US Treasury yield fell by 8 basis points to 4.32 per cent on Thursday.
Meanwhile, the rupee remained steady throughout the day. The local currency settled at Rs 83.55 per dollar, flat versus Wednesday.
“Even after volatility witnessed in the…
