Bond yields tumbled after RBI slashed the weekly debt auction amount on Friday to Rs 8000 crore from Rs 14,000 crore. Meanwhile, RBI approved the transfer of a surplus profit of Rs 52,679 crore to the government for the year ended June 2014. On the global front, U.S. Treasuries yields on Friday hit 14-month lows on anxious buying driven by American airstrikes against Islamist militants in Iraq before U.S. debt prices eased on news that Russia was winding up military exercises near the Ukraine border. Meanwhile, Brent crude oil slipped below $105 a barrel on Monday as U.S. intervention in Iraq eased concerns over the risk of disruption to supply from OPEC's second-largest producer.
Back home, the yield on soon to be benchmark 8.40%- 2024 bond were trading 5 basis points lower at 8.59% from its previous close of 8.64% on Friday. The yields on existing benchmark 2023, 10-year Government Stock were trading 3 basis points lower at 8.82% from its previous close of 8.85% on Friday.
The benchmark five-year interest rate swaps were trading 3 basis points lower at 8.10% from its previous close of 8.13% on Friday.
The Government of India announce the sale of three dated securities for Rs 8,000 crore on August 14, 2014, including (i) 8.40% Government Stock 2024 for a notified amount of Rs 4000 crore, (ii) 8.32% Government Stock 2032 for a notified amount of Rs 2000 crore and lastly (iii) 9.23% Government Stock 2043 for a notified amount of Rs 2000 crore. The auctions will be conducted using multiple 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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