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Informist, Friday, May 9, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds ended largely steady Friday in the secondary market as market participants were cautious about the tension on the border because of the military conflict with Pakistan, dealers said. Yields rose during the initial hours of trade, but ended largely unchanged from the previous close, as tensions between India and Pakistan did not worsen during the day, dealers said. 

"Levels started off higher than yesterday (Thursday) and there was upward movement of 3-4 bps (basis points), but then finally settled at yesterday's levels," a dealer at a mid-sized brokerage firm said. 

The yields reacted to reports of overnight firing across the border. The Indian defence ministry said Pakistan armed forces Thursday night launched multiple attacks using drones and other munitions along the western border. Pakistani troops also resorted to numerous ceasefire violations along the Line of Control in Jammu and Kashmir, the ministry said. While the attacks were intercepted by the Indian military, there was a blackout in Jammu and parts of Rajasthan and Punjab, media reports said. 

"Some jitters were felt in the morning... there was a sell-off due to reports of retaliation that happened post-market hours, but things cooled off, and in the second half, there was some buying," a fixed income fund manager at a mid-sized mutual fund house said. "People would not want to carry heavy positions in this situation, because Monday is also a holiday."

Reserve Bank of India-administered markets are shut on Monday on account of Buddha Purnima. Market participants said the yield movement on Tuesday will depend on updates about the geopolitical situation over the weekend. 

Foreign banks continued to be the biggest sellers Friday, along with a few mutual funds, while banks and mutual funds were largely on the buying side, dealers said. In the secondary market, deals aggregating to INR 151.81 billion were recorded on the National Stock Exchange and the BSE combined, down from INR 186.04 billion Thursday.

The papers traded most on Friday were those issued by the REC, National Bank for Agriculture and Rural Development, Telangana State Industrial Infrastructure Corp., HDFC Bank, LIC Housing Finance, and Tata Power Renewable Energy. 

The primary market did not see any major issuances on Friday. India Infrastructure Finance Co. has invited bids on Tuesday to raise up to INR 20 billion via 10-year bonds. 

UDAY BONDS

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market Friday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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