May 13, 2020 / 5:00 AM / 12 days ago

Indian bond yields spike briefly on PM's announcement of economic package

MUMBAI, May 13 (Reuters) - India’s benchmark bond yield spiked briefly on Wednesday morning following news of a 20 trillion rupees economic package, before retracing most of the losses due to the absence of details.

Prime Minister Narendra Modi said on Tuesday that India would provide 20 trillion rupees ($266 billion) in fiscal and monetary measures to support an economy battered by a sweeping weeks-long lockdown to fight the novel coronavirus.

The benchmark 10-year bond yield opened 12 bps higher at 6.28% but retreated quickly to trade flat on the day by 0445 GMT.

Traders said market positioning was light and shorting bonds was not working amid a lack of details on the economic package. Yields are expected to hold in a tight range ahead of the finance minister’s press conference later in the day which could throw more light on specifics of the stimulus package. (Reporting by Swati Bhat Editing by Shri Navaratnam)

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