Bond trading volumes plunge on Mumbai power outage

Mumbai: The Maximum City plunged into darkness at high noon on Monday, the tripped power lines stalling railroads, shutting down the web, and further straining hospitals that are already groaning under the weight of a burgeoning Covid caseload.And a victim of the collateral damage was India’s bond markets.Volumes on the platform-based and over-the-counter trading collectively were at ₹39,627 crore, compared with ₹96,309 crore last Friday, showed data from the Clearing Corporation of India (CCIL). Volumes were expected to be higher Monday after the central bank policy action last week. “The power crisis hindered bond trades with volumes dropping,” said Naveen Singh, senior vice president at ICICI Securities PD. “The power outage was unexpected. Fortunately, the regulator and local authorities were quick to remedy the situation.”The benchmark bond yield extended gains by another three basis points to close at 5.89% Monday.The secondary market for corporate bonds reported volume shrinkage of 75% — at ₹1,210.7 crore Monday against ₹4,500 crore Friday.“Many traders are now working from home, and that could have had some impact,” said Kumaresh Ramakrishnan, CIO-fixed income, PGIM Mutual Fund. “Had people fully worked from office, things could have been better as every office has a back-up for any such outage.”However, the currency market remained more or less unaffected, although daily spot market volumes fell sharply due to a trading holiday in the US. The spot market trading volumes were at about $3.1 billion compared with $9.44 billion last Friday, dealers said citing Reuters data.“Active currency desks across banks are fully equipped to deal with any such power crisis,” said Kunal Sodhani, associate vice president at Shinhan Bank. The rupee was marginally weak closing at 73.27 Monday compared with 73.13 day later.

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