10-year gilt auction sees strong demand

Mumbai The auction of benchmark 10-year paper, the first government security on sale this fiscal year, saw strong demand with the cut-off yield coming at 6.49%, in line with market levels, traders said. Falling US yields increased the appeal of Indian bonds, where yields of the 10-year benchmark closed at 6.46%, three basis points below its previous closing, CCIL data showed.

Markets have now fully priced in a 25-bps cut and a dovish commentary by the RBI on April 9, bond traders said. Yields of the 10-year US T-bill were trading at 3.92% on Friday, a day after the US announced reciprocal tariffs, against 4.05% the previous day. Market participants expect the new 10- year paper to be auctioned on May 2.