Bond yields traded lower on Tuesday as investors rushed to lap up debt securities after Reserve Bank of India (RBI) lowered interest rates by 50 basis points, higher than street expectation. Some support also came with Finance Minister Arun Jaitley’s statement that he is confident of maintaining fiscal deficit at 3.9 per cent in the financial year 2015-16 and extremely keen to better the 7.3 per cent growth of fiscal year 2014-15.
In the global market, U.S. Treasuries prices gained on Monday as global equity prices fell amid concerns over sluggish economic growth in China and falling commodity prices, ahead of Friday's highly anticipated employment report. Furthermore, Oil prices remained low in early Asian trading on Tuesday following a slide of almost 3 percent the previous session, dragged down as concerns over Asia's economic health mounted and as production remained high.
Back home, the yields on new 10 year Government Stock were trading 13 basis points lower at 7.59% from its previous close of 7.72% on Monday.
The benchmark five-year interest rates were trading 19 basis points lower at 7.69% from its previous close of 7.88% on Monday.
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 9,000 crore and Rs 5,000 crore respectively. The auction will be conducted on September 30, 2015 using 'Multiple Price Auction' method.
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