<p>The bond markets on Friday started faltering after the Finance Minister Nirmala Sitharaman announced the cut in the tax rate for corporate.</p>.<p>With investors worried over the fiscal impact of the measure, the holders of 10-year G-secs started selling the bonds, and the bond yields surged to its highest since July 2.</p>.<p>The bond yield, after the FM’s announcement, surged to 6.874%, highest since it tested 6.876% on July 2. At the time of filing this copy, the 10-year G-sec yields stood at 6.796%</p>.<p>The bond yields and the bond prices share an inverse relationship with each other.</p>.<p>“The resultant deficit will increase government borrowing which will be bond surplus hence demand will fall along with price,” analysts said.</p>.<p>The announcement will cost government revenues to the tune of Rs 1.43 lakh crore, which will impact the government estimates for fiscal deficit at a time when revenue growth isn’t up to mark.</p>
<p>The bond markets on Friday started faltering after the Finance Minister Nirmala Sitharaman announced the cut in the tax rate for corporate.</p>.<p>With investors worried over the fiscal impact of the measure, the holders of 10-year G-secs started selling the bonds, and the bond yields surged to its highest since July 2.</p>.<p>The bond yield, after the FM’s announcement, surged to 6.874%, highest since it tested 6.876% on July 2. At the time of filing this copy, the 10-year G-sec yields stood at 6.796%</p>.<p>The bond yields and the bond prices share an inverse relationship with each other.</p>.<p>“The resultant deficit will increase government borrowing which will be bond surplus hence demand will fall along with price,” analysts said.</p>.<p>The announcement will cost government revenues to the tune of Rs 1.43 lakh crore, which will impact the government estimates for fiscal deficit at a time when revenue growth isn’t up to mark.</p>
