The Hindu Business Line : Bond prices jump 30-40 paise; volumes shoot up

BOND prices moved up by 30 to 40 paise on Tuesday on the back of improved sentiment with expectations that the transaction tax would be scrapped. On Monday, the FIMMDA had made a representation to the Finance Minister on the issue.

The traded volumes in g-secs shot up to Rs 2,396 crore almost double of yesterday's levels of Rs 1,200 crore. This is, however, lower than the average volumes of R 3,000-4,000 crore seen before the announcement of the new transaction tax in the Union Budget.

Another positive in the market today during trading hours was the expectation of an EPF rate cut but subsequently the EPF rate revision decision was postponed. The most actively traded paper with a volume of about Rs 890 crore was the 11-year benchmark 7.38 per cent 2015 paper which shot up by over 40 paise to close at Rs 111.40 at the yield of 5.96 per cent up from the opening price of Rs 110.92.

The ten-year benchmark 7.37 per cent 2014 paper went all the way up to Rs 111.52 after opening at Rs 110.95, yield dipped by about 6 basis points to 5.81 per cent.

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