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Bond yields remain steady amid lack of key triggers

24 Jul 2015 Evaluate

Bond yields were trading steady at its previous close of 7.80%, amid lack of key triggers ahead of the RBI monetary policy as the insufficient monsoon and rise in inflation has dampened the possibility of a rate cut. According to India Meteorological Department (IMD) data, the shortfall in rains during the week ended July 8 was 50%, while the deficit was 12% for the July 16-22 week. Meanwhile, lack of any advancement in reforms such as GST in the present Monsoon session of Parliament, hurt the sentiments.

In the global markets, US Treasury long debt yields dropped to two-week lows on Thursday in choppy trading, as investors sought a safe haven from weak U.S. corporate earnings and slumping commodities prices. Furthermore, Oil prices rebounded in early trade on Friday after settling at their lowest in months in the previous session as worries over the demand outlook and continued oversupply weighed on the market.

Back home, the yields on new 10 year Government Stock were trading steady at its previous close of 7.80%.

The benchmark five year yields were trading 1 basis point lower at 7.97% from its previous close of 7.98% on Tuesday.  

The Government of India have announced the sale (new/re-issue) of four dated securities for Rs 14,000 crore on July 24, 2015 (i) “7.35 percent Government Stock 2024” for a notified amount of Rs 2,000 crore (nominal) through multiple price based auction; (ii) “7.88 percent Government Stock 2030” for a notified amount of Rs 6,000 crore (nominal) through multiple price based auction;(iii) “7.95 percent Government Stock 2032” for a notified amount of Rs 3,000 crore (nominal) through multiple price based auction, and (iv) “8.17 percent Government Stock 2044” for a notified amount of Rs 3,000 crore (nominal) through multiple price based auction. The underwriting auctions will be conducted using multiple price based auction method on July 23, 2015. The underwriting commission will be credited to the current account of the respective PDs at the RBI, Fort, Mumbai on the date of issue of securities.

 

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