MARKET TALK: Indian Bonds Steady; 10-Year Yield Capped At 8.20%

Indian government bonds are flat as concerns over tight liquidity and a fiscal deficit continue to hover even as the central bank is conducting buyback of bonds to ease the situation, says a senior dealer with a privately-run primary dealership. The benchmark 8.79% 2021 bond is at 104.0 vs 104.02 at Tuesday's close. "The market now feels that we are coming to the end of the cycle of open market operations. Also, the deadlock over share sales in state-run units and a wider fiscal deficit remain a concern," he says. The dealer tips the yield on the 10-year paper to move in a 8.15%-8.20% range for the session vs now at 8.18%. The local bond and spot currency markets will be shut on Thursday for Mumbai city council elections.