On short-covering, Indian bond yields fell off their highs for the day. The rupee is near a one-month low.
It’s called “Mumbai.” There were big drops in stocks and sharp rises in global crude oil prices on Monday. The Indian rupee fell to its lowest level in nearly a month against the dollar. Bond yields fell back from their highest level of the day on short-covering, and the rupee fell against the dollar.
In the last two or three weeks, oil prices rose to their highest level in nearly three weeks because of fears about a tight global supply and the growing crisis in Ukraine. [O/R]
Almost two-thirds of India’s oil comes from outside sources, and rising prices tend to push up the country’s trade and current account deficits.
At the end of Wednesday, the partially convertible rupee was trading at 76.28/29 per dollar, which is down from its close of 76.1750 on Wednesday. In the middle of the day, it hit a low of 76.43, which was its lowest since March 22.
On Thursday and Friday, the Indian financial markets were closed because they were on holiday.
The 10-year bond yield had fallen 3 basis points to 7.18 percent by 08:28 GMT.Earlier in the day, it was 7.26 percent.
“We saw some consolidation in bonds after the weak start. That’s why. Stocks are also down a lot. Unless the RBI (Reserve Bank of India) does something, yields can’t go down much from here. “One of the bank’s senior traders said this.
Indian stocks hit three-week lows after Infosys (NYSE: INFY) fell 9% on the news that it didn’t meet quarterly profit expectations. Inflation fears also weighed on the market’s sentiment. (BO)
Data show that in March, India’s annual wholesale inflation rate rose to 14.55 percent, making it the first year in a row that the rate has hit double digits. Firms are having to pay more for their raw materials and pass on higher prices to customers.
During the Russia-Ukraine conflict, there will be shortfalls in supplies and price increases for a number of input goods, which will keep domestic inflation high. This will pave the way for the central bank to begin tightening its monetary policy sooner rather than later (LON: BARC).
