in India are poised to advance after economic growth slumped to a six-year low, bolstering bets for deeper interest-rate cuts.
The economy grew 5% in the three months ended June, missing the 5.7% median estimate of economists surveyed, data released late Friday showed. India’s markets were shut on Monday.
Yields on India’s benchmark 10-year bond have dropped more than 100 basis points from their high this year as the central bank slashed rates four times in an attempt to spur growth. Another 50 basis points of rate cuts may be on the way, according to a revised forecast by Goldman Sachs Group Inc.
“GDP has significantly undershot consensus expectations,” said Nagaraj Kulkarni, senior Asia rates strategist at Standard Chartered Plc in Singapore. “So expect government bonds to rally on renewed expectations of monetary easing.”
Data released since the GDP print suggest the slowdown persists. The nation’s manufacturing purchasing managers’ index slipped in August from a month ago, while collections from the goods and services tax also eased.
The yield on the benchmark 10-year bond rose one basis point to 6.56% on Friday.