Bond yields were trading lower on the back of some buying by long term investors, but cautiousness ahead of the debt sale on Friday kept yields in narrow range. Over the last five straight trading sessions, the others category of investors including LIC, pension and insurance firms and the central bank have purchased Rs 3407 crore worth of bonds despite a broad selling pressure
On the global front, U.S. Treasuries prices rose on Tuesday after a Federal Reserve official said the central bank will likely be slow in raising interest rates and as weak corporate earnings drove safe-haven bids. Meanwhile, brent futures edged higher towards $110 per barrel on Wednesday, supported by industry data showing an unexpected draw in U.S. crude inventories and new violence in OPEC oil producer Libya.
Back home, the yields on new 10 year Government Stock 2023 were trading 3 basis points lower at 8.82% from its previous close of 8.85% on Tuesday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 8.24% from its previous close of 8.26% on Tuesday.
The Reserve Bank of India has announced the auction of 182 and 91 days Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 9000 crore respectively. The auction will be conducted on May 21, 2014 using 'Multiple Price Auction' method.
The Reserve Bank of India would be selling four dated securities for Rs 16,000 crore on May 23, 2014, including (i) 7.80% Government Stock 2020 for Rs 4000 crore, (ii) 8.83% Government Stock 2023 for notified amount of Rs 7,000 crore, (iii) 8.32% Government Stock 2032 for notified amount of Rs 3,000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 2,000 crore.