Bond yields eased for third consecutive session as traders preferred being on the sidelines ahead of the of the third debt auction of the fiscal year on Friday, where the Reserve Bank of India (RBI) is set to sell Rs 16,000 crore of bonds, as part of its Rs 3.7 trillion borrowing plan in H1FY13.
On the global front, US Treasuries held their overnight gains in Asia on Thursday ahead of a Spanish debt auction that will provide the latest gauge of investor confidence in that country's ability to finance its debt. Meanwhile, Brent crude futures held above $118 on Thursday as investors remained cautious ahead of a key Spanish bond auction, with renewed fears of a euro zone debt crisis keeping a lid on oil demand.
Back home, the yields on 10-year benchmark 8.79% - 2021 bonds were down 2 basis points to 8.34% from its previous close of 8.36% on Wednesday.
The benchmark five-year interest rate swaps were down by 1 basis point at 7.45% from its previous close of 7.46% on Wednesday.
The Government of India have announced the sale (re-issue) of four dated securities for Rs 16,000 crore on April 20, 2012, which include (i) “8.19% Government Stock 2020” for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) “9.15% Government Stock 2024” for a notified amount of Rs 7,000 crore (nominal) through price based auction (iii) “8.97% Government Stock 2030” for a notified amount of Rs 2,000 crore (nominal) through price based auction and (iv) “8.83% Government Stock 2041” for a notified amount of Rs 3,000 crore (nominal) through price based auction.