Bond yields were trading lower on Wednesday tracking lower crude prices which help ease inflation and narrow current account deficit. Additionally, hopes that RBI would slash rates in its monetary policy review on February 3, also aided the sentiment.
On the global front, U.S. Treasury prices gained on Tuesday as stocks were weaker and investors kept a cautious tone due to uncertainty over Greece's future in the euro zone. Meanwhile, Brent crude prices dropped towards $57 a barrel on Wednesday as weak Chinese manufacturing data and demand concerns outweighed supply disruptions in Libya. China's factory sector shrank for the first time in seven months in December, with the final HSBC/Markit Purchasing Managers' Index (PMI) for this month coming in at 49.6.
Back home, the yields on new 10 year Government Stock 2023 was trading 1 basis point lower at 7.86% from its previous close of 7.87% on Tuesday.
The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.18% from its previous close of 7.19% on Tuesday.
The Reserve Bank of India has announced the auction of 182 and 91 days day Government of India Treasury Bills for notified amount of Rs 5,000 crore and Rs 8,000 crore respectively. The auction will be conducted on December 31, 2014 using 'Multiple Price Auction' method.
The Reserve Bank of India will conduct Overnight repo variable rate auction for a notified amount of Rs. 25,000 crore today (December 31, 2014, Wednesday). 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.