"Overseas investors are again turning bullish on Indian debt securities," said Ajay Manglunia, executive VP (fixed income), at Mumbai-based Edelweiss Finance. Markets still expect a quarter point rate cut, which will trigger a fall in yields. "In its bi-monthly monetary policy on February 8, the Reserve Bank of India changed its stance on credit cost to “neutral” from “accommodative” belying hopes for aggressive rate cuts. "Foreign portfolio investors are now seen buying domestic corporate bonds with three-five year maturities,” said Rakesh Singh, group head – investment banking , capital & commodity markets, HDFC Bank . Amid expectation of US rate increases, the spread has expanded between US and India bond rates.

Source: Economic Times February 20, 2017 05:26 UTC