Mumbai: The biggest surge in India’s benchmark 10-year bond yield since 2013 is seen luring foreign investors back to rupee-denominated debt after a four-month hiatus.
With authorities in Asia’s third-largest economy unexpectedly keeping benchmark interest rates on hold and signalling an end to the policy easing cycle Wednesday, the 10-year yield surged 31 basis points.
It rose another five basis points to 6.79% on Thursday, widening its spread over similar-maturity US rates to 444 basis points, the highest since mid-November. India’s rupee is the region’s best performer over two days.
“The room for capital gains just went up,” said Jan Dehn, the London-based head of research at Ashmore Group Plc, which oversees about $52 billion. “I like the bonds more now than before.”
