More Stories

Informist, Tuesday, Nov. 11, 2025

By Aaryan Khanna

NEW DELHI – Government bond prices ended lower Tuesday after a seesaw session that saw the benchmark gilts swing between gains and losses. Eventually, concern that a blast in Delhi Monday was a terror attack and would provoke a government response led traders to trim their holdings of gilts, dealers said. The likely slowing of the Reserve Bank of India's speculated bond purchases failed to prop up prices in the latter part of the day's trade.

The 10-year benchmark 6.48%, 2035 gilt closed at INR 100.03, or 6.47% yield, against INR 100.19, or 6.45% yield, Monday. The most-traded 6.33%, 2035 gilt ended at INR 98.76, or 6.51% yield, against INR 98.89, or 6.49% yield, at the close of the previous session. Monday's closing yields were multi-week lows for both bonds.

The deadly car blast in Delhi, which has claimed 10 lives so far, shows that terrorism is rearing its head again, Commerce and Industry Minister Piyush Goyal said Tuesday. This was seen as the first acknowledgement from the government of a potential terrorist link to the blast. An investigation involving several federal agencies had begun Monday night, and New Delhi, Mumbai, and Uttar Pradesh, among other places, were placed on high alert.

Dealers said the potential instability deterred traders from taking positions on bonds, especially as prices had run up over the past week. The RBI had been speculated to be buying bonds in significant amounts over the past week, bringing the yield on the 6.33%, 2035 gilt down to a low of 6.48% Tuesday from the 6.60% level it had hit seven sessions ago. This prompted profit taking by traders and state-owned banks, bringing prices down, they said. As of Monday, state-owned banks had net sold INR 156.02 billion of gilts in November, against net purchases of INR 238.71 billion from the "Others" category, which includes the central bank, according to Clearing Corp. of India data for secondary market trades.

"I was looking to place a short (bet in the 6.33%, 2035 bond) at around 6.48%, in fact everyone wanted to sell at 6.45-6.48%," a dealer at a primary dealership said. "But the market has itself corrected from those levels. Nobody would want to go against the RBI but he can't keep buying forever."

At the same time, traders said that with the RBI likely to have bought between INR 200 billion and INR 250 billion of gilts since Nov. 3, a majority likely in the 6.33%, 2035 bond, the gilt offered good value above 6.50% yield. Mutual funds were also likely buyers near the end of the day's trade, limiting losses, dealers said.

Gilt prices had opened slightly lower because of the security concerns in Delhi. However, the prices recovered like they did on Monday and started moving higher as the speculated RBI purchases continued, dealers said. The central bank was likely buying bonds to put a cap on yields rather than to infuse durable liquidity at the current juncture, though this could also be a precursor to open market operation auctions to buy bonds in December, they said.

The total quantum of purchases by the central bank this month was pegged upwards of INR 200 billion, of the INR 239 billion total net purchases from the "Others" segment since Nov. 3. The RBI will release data on its secondary market activity for the week ended Nov. 7 on Friday, which is likely to confirm the speculation and the quantum bought, dealers said. 

"We are finding buyers at every level below 75 (INR 98.75 on the 6.33%, 2035 bond) immediately," a dealer at a private-sector bank said. "So it looks like the RBI is happy to take it to that level and above that is most market moving higher, including mutual funds buying."

Traders are also waiting for the October CPI inflation data and avoided placing aggressive bets ahead of the data release Wednesday. The CPI inflation data will be used to gauge the probability of a policy rate cut by the RBI's Monetary Policy Committee in December. Some traders were also concerned that a sharply lower CPI inflation print for October would lead to a higher print next year, weakening the case for easier monetary policy looking at forward inflation, dealers said.

The state bond auction result did not have a major impact on gilt prices. Public-sector banks likely bought gilts maturing in up to 15 years, though there was poor investor demand for long-term bonds, dealers said. Nine states raised INR 155.60 billion at the weekly auction Tuesday where the cut-off yield on Tamil Nadu's 10-year bond was at 7.11%, better than the expected yield cut-off of 7.14%, according to an Informist poll. 

Turnover in the gilts market was INR 562.60 billion, down from INR 644.85 billion Monday, according to data on the RBI's Negotiated Dealing System-Order Matching platform. There were no trades settled using the RBI's wholesale e-rupee pilot for the third straight day. 

OUTLOOK

Wednesday, government bond prices may open steady ahead of the October CPI inflation data at 1600 IST, dealers said. CPI inflation is seen at a record low of 0.3%, according to the median of an Informist poll of 12 economists. Traders expect the print to be between 0.3% and 0.7%, with a minority seeing deflation.

Further net purchases by the "Others" category could continue to stoke hopes of the RBI buying bonds in the secondary market at a consistent pace for the first time since January. Bonds maturing in up to 15 years are seen as the target of these purchases and will be preferred by traders, dealers said. Net secondary market purchases from the "Others" segment, which includes the RBI, totalled INR 239 billion in the week to Monday.

Developments following the blast in Delhi may be tracked closely. A security concern in Delhi or a strong response by the government may keep traders on tenterhooks, especially after the skirmish between Indian and Pakistan armed forces following a terrorist attack earlier this year, dealers said.

Traders remain uncertain whether the RBI's Monetary Policy Committee will cut the repo rate in December. At the same time, confidence in demand matching supply and the government's fiscal strength has increased after the RBI accepted only bids worth INR 210 billion against the notified INR 320 billion at the gilt auction on Oct. 31, dealers said. Traders continue to expect the RBI to soon conduct auctions to buy gilts, though estimates on the timing of such action vary.

Some traders also expect the announcement of an India-US trade deal in November, which may dent the outlook for bond prices in two ways, they said. An expected reduction in the 50% US tariff on India's exports would increase the growth outlook and weaken the case for a rate cut. At the same time, the rupee might rebound against the dollar, leading to the RBI buying the greenback to shore up its foreign exchange reserves. The infusion of rupee liquidity this will cause may weaken the case for OMO purchases in December, dealers said.

Movement in US Treasury yields, crude oil prices, and the rupee may also influence gilts. The 10-year benchmark 6.48%, 2035 bond is seen in a range of 6.44-6.51% Wednesday. The yield on the 6.33%, 2035 bond is seen at 6.46-6.54%.

India Gilts: Near day's low after Goyal says Delhi blast indicates terrorism

MUMBAI--1625 IST--Prices of most government bonds were at the day's low, reversing gains after trade minister Piyush Goyal said that the car blast in Delhi on Monday showed "terrorism rearing its head again", dealers said. On the technical front, the 6.33%, 2035 gilt yield failed to fall below the key 6.48% level, which led to traders booking profits after the yield hit 6.60% seven sessions ago.

"The public sector banks are selling as their papers are now in-the-money (profit) after long, so they (public sector banks) are booking some profits," a dealer at a private sector bank said. "Once the price starts falling, these banks will buy again...so the banks are holding both (buying and selling) sides of the movement." 

The Reserve Bank of India was likely buying gilts on-screen Tuesday as well, continuing its action since Nov. 3, dealers said. The pace of these purchases has likely slowed as bond prices have risen, and this was reflected in bonds failing to sustain gains on Tuesday, they said. After averaging over INR 51 billion worth of net buys in the secondary market last week, the 'Others' category – which includes the RBI, provident funds and insurers – net bought INR 33.24 billion Monday.

Moreover, amid uncertainty on the rate trajectory and the likelihood of an India-US trade deal, traders refrained from buying gilts and said bond prices were largely sustaining a rise only because of likely purchases by the central bank. Traders were concerned about how long the RBI would buy gilts and whether the rise in bond prices would sustain once it stopped purchases.

The total quantum of purchases by the central bank this month was pegged upwards of INR 200 billion, of the INR 239 billion total net purchases from the 'Others' segment since Nov. 3. The RBI will release data on its secondary market activity for the week ended Nov. 7 on Friday, which is likely to confirm the speculation and the quantum bought, dealers said. 

Traders are also waiting for the October CPI inflation data and avoided placing aggressive bets ahead of the data release Wednesday. The CPI inflation data will be used to gauge the probability of a policy rate cut by the RBI's Monetary Policy Committee in December. Some traders were also concerned about the fact that sharply lower CPI inflation print for October would lead to a higher print next year, weakening the case for easier monetary policy looking at forward inflation, dealers said.

The state bond auction result did not have a major impact on gilt prices. Public sector banks likely bought gilts maturing in up to 15 years, though there was poor investor demand for long-term bonds, dealers said. Nine states raised INR 155.60 billion at the weekly auction Tuesday where the cut-off yield on Tamil Nadu's 10-year bond was at 7.11%, better than the expected yield cut-off of 7.14% according to an Informist poll. 

At 1625 IST, the turnover in the gilt market was INR 513.45 billion, slightly lower than INR 546.40 billion at 1630 IST Monday, according to data on the RBI's Negotiated Dealing System-Order Matching platform. The yield on the 6.48%, 2035 benchmark bond is seen moving in a range of 6.43-6.48% during the day, while that on the 6.33%, 2035 bond is seen at 6.45-6.52%.  (Janwee Prajapati)

India Gilts: Most tad up; reverse early losses on bets of RBI buys

MUMBAI--1330 IST--Prices of most government bonds reversed early losses and were a tad up on bets that the Reserve Bank of India was purchasing gilts on screen, dealers said. Through the price action and volumes, traders speculated that the central bank was likely buying the 6.33%, 2035 bond Tuesday, since the prices of other gilts were largely steady. Other market participants such as banks and mutual funds refrained from aggressive purchases, as traders preferred to book profits, while a few bought gilts on bets of a lower-than-estimated CPI print for October.

The RBI was likely buying gilts on-screen Tuesday as well, after likely purchasing gilts since Nov. 3, dealers said. However, amid uncertainty on the rate trajectory and the likelihood of an India-US trade deal, traders refrained from buying gilts and said bond prices were largely sustaining a rise only because of likely purchases by the central bank. Traders were concerned about how long the RBI would buy gilts and whether the rise in bond prices would sustain once it stopped purchases, if data does prove that the central bank is buying gilts. Some expect the yield on the 6.33%, 2035 gilt to rise back to 6.55% if RBI's support ends at on-screen purchases. Before that, the yield could fall to 6.45% if India's CPI inflation for October surprises on the downside, or if the RBI announces an open market purchase of gilts through auction. Inflation data for October is due at 1600 IST Wednesday. Traders largely expect headline inflation in the range of 0.3-0.7%. If it is within expectations or lower, the print could lend positive sentiment, since RBI Governor Sanjay Malhotra said at the outcome of the October Monetary Policy Committee meeting that low inflation created space for policy easing. Expectations of India slipping into deflation in October are gaining traction, dealers said. Deflation is when inflation falls into negative, suggesting prices have fallen on an year-on-year basis. 

"I think it (RBI) will buy 25 to 28 (INR 250 billion to INR 280 billion)," a dealer at a state-owned bank said. "The 'others' buys is not only RBI, so till now (from Nov. 3) I think it would've bought 18 to 20 (INR 180 billion to INR 200 billion worth of gilts)." Data from Clearing Corp. of India showed that participants classified as 'others' – which include the central bank, provident funds, and insurers – have net bought gilts worth INR 238.71 billion since Nov. 3.

At the state bond auction, traders bid for bonds maturing in up to 10 years, while some demand from long-term investors is seen for long-term bonds. While demand for long-term state bonds could be subdued ahead of fresh supply of INR 160 billion of the 6.68%, 2040 gilt and INR 120 billion of the 6.90%, 2065 bond Friday, traders expect insurers and pension funds to pick up the securities due to lucrative yields, dealers said. Reports of RBI asking states to reduce their borrowing also provided comfort to traders, after heavier than expected state bond supply in Jul-Sept.  

"Up to 10-year (state bonds) papers are good for trading," a dealer at a state-owned bank said. "The 7-year, 8-year papers are good to hold until before MPC because by then, rate cut expectations will pull down yields." 

Several traders have pared their expectations of the central bank holding a variable rate reverse repo auction atleast till next week, even as the liquidity surplus remains above INR 2.00 trillion. Some traders were using their excess liquidity to buy gilts, but replacement demand after redemption of INR 981.78 billion of the 5.15%, 2025 gilt Sunday was only likely to be seen after CPI inflation data provided some clarity on rates, or after confirmation of gilt purchases from the RBI, dealers said. Weekly statistical data from the RBI for the week ended Nov. 7, due on Friday, will be key to confirm traders' speculation that the central bank is purchasing gilts on-screen. 

At 1330 IST, the turnover in the gilt market was INR 279.15 billion, slightly lower than INR 302.40 billion at the same time Monday, according to data on the RBI's Negotiated Dealing System-Order Matching platform. The yield on the 6.48%, 2035 benchmark bond is seen moving in a range of 6.43-6.48% during the day, while that on the 6.33%, 2035 bond is seen at 6.45-6.52%.  (Cassandra Carvalho)

India Gilts: Tad down on security concerns after Delhi blast

MUMBAI--0936 IST--Government bond prices fell Tuesday due to security concerns after a bomb blast in New Delhi Monday killed at least eight people and injured 24 others, dealers said. Market participants are concerned that there could be more such incidents and if India retaliates, this could escalate into a larger conflict.

However, expectation of support from the Reserve Bank of India to bring down bond yields will likely limit the losses. Data from the Clearing Corp. of India showed participants classified as 'others' – which includes the central bank, provident funds, and insurers – were the largest net buyers of gilts Friday and bought bonds worth INR 33.24 billion. Including the purchase amount Monday, total purchases from the 'others' were INR 238.71 billion from Nov. 3. Some traders were cautious of placing aggressive bets as they believed the Reserve Bank of India purchased bonds to replenish the 5.15%, 2025 bond, which matured Sunday, from its portfolio.

"The overall market is structurally positive and will remain range-bound till policy," a dealer at a state-owned bank said. "The CPI inflation data is likely to have very limited impact on the market."

Traders are likely to wait for the October CPI inflation data and avoid placing aggressive bets ahead of the data release Wednesday. The CPI inflation data will lend cues on the possibility of a policy rate cut by the RBI's Monetary Policy Committee in December. Traders largely expect headline inflation for October to be between 0.3% and 0.7%. A few traders also expect deflation in October. Deflation is when inflation turns negative, which means prices have fallen on an year-on-year basis.

Traders expect the auction of state government bonds later Tuesday to sail through but the increased supply is likely to weigh on gilt prices. Nine states will raise INR 165.60 billion, lower than the originally planned INR 280 billion as per the borrowing calendar for the December quarter. After yields on state bonds rose significantly, the RBI advised states to reduce their borrowing in order to ease the excessive supply of state bonds in the bond market, according to dealers. Apart from this, the central bank also rejected all bids for the 2032 bond at the weekly auction of gilts. The spread between the 10-year state government bond and the benchmark gilt of the same maturity contracted 4 basis points in October.

At 0951 IST, the turnover in the gilt market was INR 56.10 billion, slightly higher than INR 35.05 billion at 0930 IST Monday, according to data on the RBI's Negotiated Dealing System-Order Matching platform. The yield on the 6.33%, 2035 benchmark bond is seen moving in a range of 6.48-6.55% during the day, while that on the 6.48%, 2035 bond is seen at 6.43-6.49%.  (Janwee Prajapati)

India Gilts: Seen dn on Trump's trade deal comments, concern over Delhi blast

MUMBAI – Prices of government bonds are seen opening lower Tuesday after US President Donald Trump said the US was "pretty close" to doing a trade deal with India. Prices may also open lower on concerns whether the bomb blast in New Delhi Monday was terror-linked, dealers said. After a four-day streak of bond prices closing largely higher, traders may trim portfolios while booking profits, dealers said.  

The yield on the 10-year benchmark 6.48%, 2035 gilt is seen moving in a range of 6.43-6.50% during the day. On Monday, the benchmark 2035 gilt ended at INR 100.19, or 6.45% yield. The erstwhile 10-year benchmark 6.33%, 2035 bond is expected to move in a range of 6.48-6.56%. On Monday, it ended at INR 98.89, or 6.49% yield. At 0815 IST, the yield on the 10-year benchmark US Treasury note was 4.12%, little changed from 4.13% at 1700 IST Monday.

Trump said the US is coming closer to making a "fair trade deal" with India. "We're making a deal with India. Much different than we had," Trump said during the swearing-in ceremony of Sergio Gor as the Ambassador to India. "Right now they don't love me but they will love us again. We're getting a fair deal." Potential developments towards a deal are seen detrimental to gilt prices as a breakthrough weakens the case for the Reserve Bank of India's Monetary Policy Committee to cut rates in December.

Back home, at least eight people were killed and several injured in a blast near the Red Fort metro station in the capital Monday. Delhi, Mumbai, and Uttar Pradesh, among other places, have been put on high alert after the blast, news reports said. Prime Minister Narendra Modi spoke to Home Minister Amit Shah and took stock of the situation following the bomb blast in the capital, government sources said Monday. Concerns of whether the explosion was terror-linked may weigh on government bonds. 

However, expectation of support from the central bank to bring bond yields lower may limit the losses. Data from Clearing Corp. of India showed that the 'others' segment of market participants – a category that includes the RBI, provident funds, and insurers – was the largest net buyer of gilts for the fifth straight session Monday, purchasing bonds worth INR 33.24 billion. Some traders had feared Monday that the central bank was likely buying gilts onscreen last week only to replenish its portfolio after the redemption of the 5.15%, 2025 gilt, which matured on Sunday, and were waiting for Monday's data to prove otherwise, dealers said. Weekly statistical data from the RBI for the week ended Nov. 7, due Friday, will be key to confirm traders' speculation that the central bank is purchasing gilts onscreen. 

Nearing the end of trade Tuesday, traders may avoid aggressive positions ahead of domestic CPI-based inflation data for October, that is due Wednesday, as they look for cues on the possibility of a policy rate cut by the RBI's MPC in December. CPI inflation is projected to fall to a record low of 0.3% in October due to the statistical effect of a high base, lower food prices, and reduction in goods and services tax rates, according to an Informist poll of 12 economists. 

Traders largely expect headline inflation in the range of 0.3-0.7%, but if within expectations or lower, the print could lend positive sentiment, since RBI Governor Sanjay Malhotra said at the October Monetary Policy Committee meeting outcome that low inflation created space for policy easing. A few traders also expect deflation in October.  (Cassandra Carvalho)  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.