Bond yields edged lower on Thursday, tailing lower US treasury yields after Federal Reserve signalled that interest rates will stay low for a while yet. Additionally, higher brent crude prices also bolstered the appetite for safe haven instruments, such as bonds. But, the yields were stuck in tight range on account of caution ahead of Rs 15,000 crore debt sale, which is scheduled to be held on Friday.
On the global front, U.S. Treasuries prices gained on Wednesday after the Federal Reserve took a more dovish stance on monetary policy than some had expected at its June meeting, a day after data showed inflation pressures are rising. Meanwhile, brent crude held near a nine-month high above $114 a barrel on Thursday supported by concerns about potential supply disruptions due to fighting in Iraq.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 8.66% from its previous close of 8.67% on Wednesday.
The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.87% from its previous close of 7.88% on Wednesday.
The Governments of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore on June 20, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 3000 crore, (ii) 8.60% Government Stock 2028 for notified amount of Rs 7000 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 2000 crore. The auctions will be conducted using uniform price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.
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