RBI Monetary Policy Committee (MPC) maintained status quo with a 6-0 unanimous vote, both on policy rate and on its accommodative stance. While the bond market was not expecting a rate move at this policy, there were some worries about the possibility of a stance change to neutral.
Indian sovereign bond ended 5 bps higher to 6.60%. Markets reacted to the measures taken by the government in Budget for opening up domestic bond markets to overseas investors, including the idea of inclusion of Indian bonds in global bond indices.
Indian equity market remained resilient despite the Coronavirus outbreak leading to a global sell-off. A 15% fall in oil prices in January and high Budget expectations likely drove India’s relative outperformance to Emerging Markets (EMs).
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