MUMBAI: The benchmark bond yield slid to an 11-year low amid dipping global crude oil prices. While the outbreak of Covid-19 stoked investor fear pointing to global growth slowdown, oil producing countries are now engaged in an all-out price war by raising outputs. This could well provide New Delhi an opportunity to lift the country’s sinking growth amid chances of sharper rate cuts by the Mint Street. “The current scene is a blessing in disguise for us,” said A Balasubramanian, CEO of Aditya Birla Mutual Fund. “While plunging yields point to brighter chances of rate cuts in the coming policy, this could well provide opportunity to regain confidence in local economy. A few fiscal stimulus packages can quickly revive confidence of the economy.” Funding costs are set to fall with the sovereign yield slipping below the crucial 6% mark for the first time since February 13, 2009 when the global subprime crisis was at its peak. The sovereign matric erased partial gains to close at 6.06% after hitting 5.99% on Monday. Corporate bonds are priced in sync with the benchmark gauge. Bond prices rise when yields fall. Suyash Choudhary, head of fixed income at IDFC Mutual Fund, India, said the… Read full this story
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