The exit polls announced on Sunday for the 17th Lok Sabha election came as a cheer for the bond markets too.

And as the bond maturing in 2029 ended at its highest price since April 3 of Rs. 99.81, 10-year benchmark yield fell sharply to 7.29% from 7.36% at the previous close.

Exit poll point to clear cut victory for the BJP as it is expected to get some 242-365 seats out of 542 constituencies and for winning the elections a total of 272 is required. The election results are due on May 23, 2019.

"Bond yields are unlikely to react to election results for more than one or two sessions. They will be driven by liquidity conditions in terms of measures from RBI and government borrowings," said Madan Sabnavis, Chief Economist, CARE Ratings. "We do not expect the MPC to lower the rates in the upcoming policy. But if it does, the bond yields may ease to 7.25-7.3 percent," he added.

Today the -year benchmark yield is trading at around 7.302%.

GoodReturns.in