Mumbai, Aug 26 (IANS) A slide in oil prices and in US Treasury yields, saw sovereign bonds in India rallying on Monday after the Centre restrained itself from providing a large fiscal stimulus to the economy, allaying fears of further government borrowing.
Finance Minister Nirmala Sitharaman on Friday rolled back the tax surcharge on foreign portfolio investors (FPIs), besides announcing a slew of measures for the auto sector, and front-loaded the capital infusion of an already announced Rs 70,000 crore ($9.8 billion) into public sector banks (PSBs).
Among the steps announced by the Finance Minister, there were no direct fiscal support measures that indusrtry had been calling for.
Market players said the measures announced, without putting any fiscal burden on the government, comforted investors.
The yield on the benchmark 10-year bonds fell five basis points on Monday to 6.52 per cent. The rupee slid 0.6 per cent to 72.0975 per US dollar.
Yields have risen 22 basis points over the past three weeks on concerns that the government may spend more to accelerate growth in a slowing economy.
Indian equities were due for a comeback after declining steeply earlier, and Friday's announcements by Sitharaman provided the much awaited boost. However, the global business scenario remains tense owing to the China-US trade skirmishes.