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Stars align for Indian bonds to extend rally to 2025 – Times of India – Subrang Safar: Your Journey Through Colors, Fashion, and Lifestyle
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div class=”wJnIp”><img src=”https://static.toiimg.com/thumb/msid-115891044,imgsize-77498,width-400,resizemode-4/115891044.jpg” alt=”The stars are aligning for Indian bonds to extend the rally through 2025.” title=”Even as “مضبوط ڈالر اور امریکی ٹریژری کی اعلی پیداوار کی وجہ سے سرفہرست ہیں، جاری بانڈ انڈیکس کی شمولیت کے بہاؤ سے ہندوستانی بانڈز کو مستقل ٹھوس غیر فعال مدد فراہم کرنے کا امکان ہے۔ (AI تصویر)” decoding=”async” fetchpriority=”high”/>
Even as “strong dollar and higher US Treasury yields lead, ongoing bond index inclusion flows are likely to provide continued solid passive support to Indian bonds. (AI Image)
Indian Bonds Four are set for an excellent year and investors expect further gains from a combination of policy drivers and resilient domestic demand. Expectations of central bank rate cuts from early next year on slow economic growth, index inclusion continued Foreign arrivals And strong demand from local pension and insurance companies is likely to further burnish the appeal of sovereign notes. Quantum Asset Management forecasts a 50-basis-point drop in yields on the benchmark 10-year bond by mid-2025, while the trust mutual fund sees rates rising to 6.25%-6.5% over the next year and a half. While a rising dollar and higher Treasury yields have dampened the appeal of emerging market assets in recent weeks on concerns about US President-elect Donald Trump’s policies, Indian bonds have remained largely unscathed. Even as “headlines are dominated by a stronger dollar and higher US Treasury yields, ongoing bond index inclusion flows are likely to provide continued solid passive support to Indian bonds,” Barclays Plc strategists including Matul Kotecha wrote in a note. Indian bonds set for best year in four The yield on the 10-year bond closed down nine basis points on Friday at 6.74 percent, down a few basis points since the announcement of the U.S. election results in early November. Bonds rallied on Friday after data showed India’s gross domestic product grew at its slowest pace in nearly two years, prompting the central bank to ease liquidity measures or interest rates. Expectations are low. This does not mean that the market is free of volatility. Yields rose to 6.87% on Nov. 22, the highest in more than two months, as some global investors opted to cash in pending further clarity on Trump’s policy. JPMorgan Chase & Co. The inflow rush is also taking a breather due to the country’s inclusion in K’s flagship index. Despite short-term swings, the 10-year yield is down more than 40 basis points this year, the most since 2020. This came as local bonds received foreign inflows of about $15 billion during the period, helped by a rise in the JPMorgan gauge. India’s index-eligible bonds are also slated to find a place in other global indices, including the FTSE Russell, from next year, likely attracting more foreign inflows. While Reserve Bank of India With its policy rate likely to remain unchanged on December 6, traders will be watching for signs of when it will start cutting rates. The RBI neutralized its policy stance in its most recent rate decision in October. Pankaj Pathak, a fixed income fund manager at Quantum Asset, said a rate cut of 50 basis points by June 2025 is pricing in changes. He said that bond easing and higher foreign inflows are likely to benefit.