Bond yields edged lower on account of short covering activities by dealers on talks that central bank had purchased as much as Rs 3277 crore from the bond market on Tuesday possibly to replenish the bonds that are due to mature. However, further uptrend of bonds is unlikely as traders are bracing for the Rs 20,000 crore bond auction on Thursday.
On the global front, U.S. Treasury debt prices gained on Tuesday as rising tensions in Ukraine sparked a safety bid for U.S. bonds, and a weak manufacturing survey for New York state pointed to sluggish economic momentum. Meanwhile, Brent crude ebbed towards $109 a barrel on Wednesday, coming off a six-week high as slower Chinese economic growth and a gradual resumption of Libyan oil exports counterbalanced support from geopolitical risks in Ukraine.
Back home, the yields on new 10 year Government Stock 2023 were trading 3 basis points down at 8.92% from its previous close of 8.95% on Tuesday.
The benchmark five-year interest rate swaps were trading 1 basis point down at 8.49% from its previous close of 8.50% on Tuesday.
The Government of India has announced the sale (re-issue) of four dated securities for Rs 20,000 crore on April 17, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 5000 crore, (ii) 8.24% Government Stock 2027 for a notified amount of Rs 9,000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 3000 crore and lastly, (iv) 9.23% Government Stock 2043 for a notified amount of Rs 3000 crore respectively.
The Reserve Bank of India has announced the auction of 91 and 364 days Government of India Treasury Bills for notified amount of Rs 9,000 and Rs 6000 crore respectively. The auction will be conducted on April 16, 2014 using 'Multiple Price Auction' method.