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Bond yields trade steady; FII auction disappoints

05 Jul 2012 Evaluate

Bond yields were trading steady as hopes of strong demand from overseas investors for high-yielding Indian government bonds at a permits auction on Wednesday turned halfhearted, counterbalanced by marginal trading ahead of the European Central Bank meeting later in the day.

On the global front, Benchmark oil prices fell back below $100 a barrel on Wednesday, after a sharp gain in the previous day, as new evidence of grim economic conditions in Europe offset expectations of fresh stimulus measures. Meanwhile, the US markets remained closed for a public holiday.

Back home, the yields on 10-year benchmark 8.79% - 2021 was trading flat at 8.16% from its previous close.

The benchmark five-year interest rates were down 1 basis point at 7.20% from its previous close.

The Government of India have announced the sale (new/re-issue) of four dated securities for  Rs 15,000 crore on July 6, 2012,k which include, (i) “8.19 percent Government Stock 2020” for a notified amount of  Rs 4,000 crore (nominal) through price based auction; (ii) “New 14 years Government Stock 2026” for a notified amount of  Rs 6,000 crore (nominal) through yield based auction; (iii) “8.28 percent Government Stock 2032” for a notified amount of  Rs 2,000 crore (nominal) through price based auction; and (iv) “8.83 percent Government Stock 2041” for a notified amount of  Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on July 06, 2012.

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