Bond yields edged marginally higher on Tuesday, as investors turned cautious after the federal government announced the issuance of a new 10-year paper this week. Government will sell four dated securities amounting to Rs 15,000 crore on May 12, 2017. The auctions will be conducted using multiple price method. The stocks will be issued for a minimum amount of Rs 10,000 and in multiples of Rs 10,000 thereafter.
However, investors got some confidence with IMF’s report indicating that India's growth is expected to rebound to 7.2% in the 2017-18 fiscal and 7.7% in 2018-19. According to the report, the temporary disruptions (primarily to private consumption) caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease.
In the global market, US Treasury yields rose on Monday with benchmark yields hitting a four-week high in advance of the sale of $62 billion in bond supply at this week's quarterly refunding and following centrist Emmanuel Macron's victory in the French presidential run-off. Furthermore, oil prices edged up, driven by anticipation that an OPEC-led pledge to cut production would be extended beyond the first half of the year and into 2018, although overall high supply still weighed on markets.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 6.94% from its previous close of 6.93% on Monday.
The benchmark five-year interest rates were trading 1 basis point higher at 7.06% from its previous close of 7.05% on Monday.