Nov. 26 (Bloomberg) -- India’s 10-year bonds rose for a second day on speculation investors will seek the relative safety of debt as the nation’s benchmark stock index headed for a third weekly decline. Yields fell to their lowest level in more than three weeks after Finance Minister Pranab Mukherjee yesterday asked lenders to check their “exposure” to the companies named by federal investigators in a bribery and improper credit disbursal probe. The Bombay Stock Exchange’s Sensitive Index has retreated 9 percent from a Nov. 5 record close as Europe’s debt crisis and skirmishes between North and South Korea this week roiled investor confidence. “Equities and bonds are in a way countercyclical,” said Pradeep Madhav, managing director of Mumbai-based Securities Trading Corp. of India. “Under these circumstances, when there is bad news coming, one would expect that people will tend to go for bonds.” The yield on the 7.80 percent note due May 2020 fell three basis points today and five basis points this week to 7.98 percent as of 10:33 a.m. in Mumbai, according to the central bank’s trading system. The price rose 0.22, or 22 paise per 100 rupee face amount, to 98.81. India’s federal investigation agency arrested LIC Housing Finance Ltd. Chief Executive Officer Ramachandran R. Nair and seven bank and brokerage officials following a probe into bribes and improper loan disbursals, P. Kandaswamy, the Central Bureau of Investigation’s inspector general for Mumbai Zone 2, said on Nov. 24. --Editors: Andrew Janes, Ven Ram To contact the reporter on this story: V Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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