MUMBAI: The Reserve Bank on Wednesday said it will conduct simultaneous purchase and sale of government securities for Rs 10,000 crore each under Open Market Operations (OMOs) on March 18, 2020. The decision was taken after a review of the current liquidity and financial conditions, the RBI said in a statement while announcing the special OMO. The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly functioning of financial markets, it added. Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Sec of longer maturities and selling equal amount of G-Sec of shorter maturities.
Government Security (G-Sec) yields rose on Friday as the Reserve Bank of India devolved a significant portion of the auction of three G-Secs on Primary Dealers, indicating its discomfort with the yie
Positive bias seen for Nifty at open
March 03, 2021
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Concerns on rising bond yields have softened after central bankers across the world have pushed back against higher rates
After gaining sharply in the last couple of days, Indian markets are likely to open flat on Wednesday. The SGX Nifty at 15,020 points to a 60-point positive opening for Nifty futures, which on Tuesday closed at 14,958.15.
Global markets too present a firm trend with most of Asia-Pacific ruling in positive territory though overnight the US markets closed in the red.
Concerns pertaining to rising bond yields appear to have softened a bit after central bankers across the world have begun to push back against higher rates. This should offer some comfort to Indian equities and INR as rising bond yields in the US and declining spreads between US Treasury yields and India’s G-Sec yields had started putting pressure on INR.
India’s stock bulls have more reasons to worry after having suffered back-to-back weekly losses as yields on the government bonds climb with global peers. The ratio between the nation’s benchmark 10-year yield and the BSE Sensex index’s current earnings yield is now at the highest level since 2001, dimming the appeal of equities. However, ICICI Securities isn’t swayed, saying in a note Monday that Indian equities don’t look overvalued relative to bonds even after the yield spike, adding that a situation of higher economic growth and moderate inflation would be bullish for stocks. Dear Reader,
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