Bonds yields edged lower on Monday on expectation that India will allow global funds to buy more debt as authorities review investment limits. Promising a steady increase in FII investment limit in government bonds, RBI Governor Raghuram Rajan said the ceiling will be revised twice a year and efforts are being made to make such investment easier. However, the possibility of Greek exiting the euro zone after they rejected the tough austerity measures proposed by creditors continued to weigh on investor sentiment.
In the global markets, the safe haven US treasuries strengthened, pushing the yields lower across the board after the Greek referendum on Sunday resulted in a stunning majority of a ‘No’ vote. Furthermore, Oil prices fell sharply early on Monday after Greece rejected austerity measures demanded in return for bailout money and as China rolled out an unprecedented series of steps to prevent a full-blown stock market crash.
Back home, the yields on 10 year Government Stock was trading 2 basis points lower at 7.78% from its previous close of 7.80% on Friday.
The benchmark five year yields were trading down by 1 basis point at 7.97% from its previous close of 7.98% on Friday.
The Reserve Bank of India has announced the auction of 91-days and 364-days Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6,000 crore respectively. The auction will be conducted on July 08, 2015 using 'Multiple Price Auction' method.