MUMBAI, Feb 3 (NI24) - Indian federal bond yields rose on Thursday on fears of more monetary tightening following a pick up in food and fuel inflation for a second straight week."People are concerned that if the (food inflation) data shows an uptick next week too, then the monthly inflation could top 8 percent (again)," said Sandeep Nigudkar, assistant vice president of treasury at Dhanlaxmi Bank.
India's food price index rose 17.05 percent and the fuel price index climbed 11.61 percent in the year to Jan. 22. In the prior week, annual food and fuel inflation stood at 15.57 percent and 10.87 percent. [ID:nDEL000075]
India's central bank last month raised interest rates by 25 basis points to clamp down on resurgent inflation, which stood at 8.43 percent in December, and warned of persistently high food prices unless steps are taken to boost supplies. [ID:nSGE70O07R]
Dealers also said political turmoil in Egypt also weighed on sentiment as India imports most of its daily oil requirements and was vulnerable to an oil price shock.
At 6:12 p.m. (1243 GMT), U.S. crude futures for March delivery CLc1 was up 88 cents at $91.74 a barrel after touching a high of $92.05.
Yield on the most-traded 8.08 percent, 2022 IN080822G=CC and the second most traded 8.13 percent, 2022 IN081322G=CC both ended 2 basis points (bps) higher at 8.21 percent and 8.19 percent.
The less liquid 10-year benchmark bond yield IN078020G=CC settled at 8.16 percent, up 1 bp from its previous close.
In the overnight indexed swaps, the the one-year rate INRAMONMI1Y= ended steady at 7.40 percent and the five-year rate INRSMONMI5Y= ended at 8.01 percent, up 2 bps.
Dealers said mood also remained cautious ahead of auctions on Friday when the government is scheduled to sell 100 billion rupees ($2.2 billion) of bonds. [ID:nMBI000673] ($1 = 45.6 Indian rupees)
