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Bond yields nudged higher after three days weakness

21 Jun 2011 Evaluate

Indian bond yields nudged higher on Tuesday for the first time in four sessions as traders booked profits in bonds after a sharp rally. On the other hand, investors were also making room for the auction of the three dated securities for Rs 12,000 crore slated to be held on June 24, 2011. On the global front, US Treasuries prices were little changed on Monday, as gains on Wall Street offset fears over contagion from Greece's fiscal crisis, slowing the bond market's momentum for further decline in yield as the Bond prices rose overnight after euro zone ministers said the heavily-indebted euro zone nation had to approve stricter austerity measures before a final decision would be made on extending another 12 billion Euros in loans.

The yields on 10-year benchmark, the 7.80% - 2021 was at 8.23%, higher than 8.19% on Monday, as traders booked profits after the recent three-session rally while a marginal rise in global crude oil prices also weighed on sentiment.

The benchmark five-year interest rate swap at 7.66%, higher than Monday's close of 7.60%.

Government of India has announced the sale of three dated securities for Rs 12,000 crore on June 24, 2011.

The Government of India have announced the sale (re-issue) of (i) “7.59 percent Government Stock 2016” for a notified amount of `3,000 crore (nominal), (ii) “8.08 percent Government Stock 2022” for a notified amount of `6,000 crore (nominal) and (iii) “8.28 percent Government Stock 2032” for a notified amount of `3,000 crore (nominal) through price based auctions. The auctions will be conducted using uniform price method. The Reserve Bank of India at Mumbai will conduct the auctions on June 24, 2011.

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