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<div id=”newnavbar”>versubscription. For long-term government bonds with a minimum residual maturity of five years, FIIs put in bids worth Rs 12,094 crore against limits of Rs 10,264 crore.

Bond market experts attributed the success of the auction to FIIs' anticipation of likely trading gains in light of a probable interest rate cut by RBI in January because of moderating inflationary expectations, apart from a need by sovereign and pension funds to diversify their portfolios. Bond yields and prices move inversely.

When yields fall, traders gain as bond prices rise and vice versa. "With inflation reading coming lower and overall growth trending lower, a rate cut in January may be a given, so there is an opportunity to make trading gains (in categories where there is no duration limit)," said Sandeep Bagla, executive vice president, ISec Primary Dealership, "We have seen good interest from long-

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