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Bond yields fall sharply tailing gains of Rupee

19 Dec 2014 Evaluate

Bond yields dropped sharply on Friday on the back of gains of Indian currency and lower brent crude prices. On the current front, Indian rupee after making a decently positive start, continued to hold strong against dollar for second consecutive session on Friday tracking gains of local equities.

On the global front, U.S. Treasuries yields rose on Thursday as Wall Street shares gained a day after the U.S. Federal Reserve signaled it might raise interest rates in 2015 but would do so at a gradual pace. Meanwhile, Brent crude held below $60 a barrel near a 5-1/2-year low on Friday as a global oversupply of oil showed little sign of receding, even as companies cut upstream investments next year

Back home, the yields on new 10 year Government Stock 2023 was trading 1 basis point lower at 7.92% from its previous close of 7.93% on Thursday.

The benchmark five-year interest rate swaps was trading 1 basis point lower at 7.27% from its previous close of 7.28% on Thursday.

The Government of India have announced the sale (re-issue) of the Government Stock through auctions to be held on December 19, 2014, including (i) 8.27 per cent GS 2020 for a notified amount of Rs 3000 crore, (ii) 8.40 per cent GS 2024 for a notified amount of Rs 6000 crore, (iii) 8.24 per cent GS 2033 for a notified amount of Rs 2000 crore and lastly (iv) 8.17 per cent GS 2044 for a notified amount of Rs 3000 crore.

The Reserve Bank of India will conduct 3 day repo variable rate auction for a notified amount of Rs. 35,000 crore on December 19, 2014, Friday. The auction will be conducted between 4.00 pm and 4.30 pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.

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