(Bloomberg) -- Indian bonds fell, pushing benchmark yields to a one-month high, amid uncertainty over the sale of overseas bonds and concerns the government may borrow more to fund measures to boost a slowing economy.
The yield on 10-year notes touched 6.62%, the highest since July 5, and traded at 6.60% at 11:55 a.m. in Mumbai.
“With foreign bonds out of the picture, the case for supply reduction has gone and on top of that we are starring at the risk of higher supply if the government implements stimulus,” said Naveen Singh, head of fixed-income trading at ICICI Securities Primary Dealership Ltd. Traders are also worried by signs of core inflation edging up, which may prompt the central bank to pause its monetary easing for now, he said.
READ: India Never Sold Foreign Debt. Its First Attempt Is Failing Too
Sovereign bonds have sold off for five straight days, the longest losing streak since January, amid worries the government may end up borrowing more than the record 7.1 trillion rupees planned for the year to March to pay for stimulus measures. The rupee has slid 3% this month in Asia's worst performance.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net, Ravil Shirodkar
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