Bond yields edged higher as investors sold some of their debt holdings to make space for the upcoming Rs 15,000 crore worth bond auction on Friday. However, losses remained capped as better-than-expected start to monsoon rains eased concern that inflation will quicken.
The Government of India has announced the sale (re-issue) of four dated securities for Rs 15,000 crore on June 19, 2015, which includes, (i) 7.68 % Government Stock 2023 for a notified amount of Rs 3000 crore, (ii) 7.72% Government Stock 2025 for a notified amount of Rs 6000 crore, (iii) 8.24% Government Stock 2033 for a notified amount of Rs 3000 crore and lastly (iv) New 30 year Government Stock for a notified amount of Rs 3000 crore.
In the global markets, U.S. Treasury yields rose on Thursday and the yield curve steepened after stronger economic data increased speculation that inflation would increase and that the Federal Reserve is closer to raising interest rates. Further, Oil futures prices dipped slightly in thin trade on Friday as forecast higher production by U.S. shale oil producers this year added to lingering worries over demand.
Back home, the yields on 10 year Government Stock was trading 1 basis point higher at 7.77% from its previous close of 7.76% on Thursday. Furthermore, the benchmark five year yields were trading up by 2 basis points at 8.00% from its previous close of 7.98% on Thursday.