Bond yields inched higher on caution ahead of the end of fiscal year, while overnight rise in US treasury yields and higher crude oil prices also weighed on the sentiment. The yields were edging lower for past few sessions on speculation of government not immediately raising foreign investment limit in government bonds.
On the global front, US treasuries yield rose on Wednesday following weak demand for a $35 billion sale for a new five year notes, indicating yields may need to rise further to attract demand for Thursday’s sale of seven year notes. Meanwhile, brent crude shot up nearly 6% on Thursday after Saudi Arabia and its Gulf Arab allies began a military operation in Yemen, but the benchmark later came off its high near $60 as importers saw no immediate threat to supplies.
Back home, the yields on 10 year Government Stock was trading 2 basis points higher at 7.79% from its previous close of 7.77% on Wednesday.
The benchmark five-year interest rate swaps were trading 2 basis points higher at 7.08% from its previous close of 7.06% on Wednesday.
The Reserve Bank of India will conduct overnight variable rate reverse repo auction for a notified amount of Rs 30,000 crore on March 26, 2015, Thursday. 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.