Bond yields dropped to its lowest level in two months in the opening deals on Friday after government sticking to its second-half borrowing schedule of Rs 2 lakh crore, allayed fears of a fiscal slippage to a small extent. Further towards the development, government has already borrowed Rs 3.7 lakh crore in the first half ending September 30, which is 65 per cent of the total planned borrowing. The Budget had pegged the Centre’s total gross borrowing for 2012-13 to be at Rs 5.69 lakh crore.
On the global front, US 10-year Treasuries rose in Asian trade on Friday but gains were limited after Spain announced a tough 2013 budget that could pave the way for central bank action to help ease the euro zone's debt crisis. Meanwhile, Brent crude held firm above $112 as plans for economic reform in Spain eased investor concerns about Europe's fiscal crisis and revived hopes of a recovery in oil demand growth, with Middle East supply worries also providing the required impetus to the commodity prices.
The yields on 10-year benchmark 8.79% - 2021 dropped to its lowest in two months at 8.11% from its previous close of 8.16%.
The benchmark five-year interest rates edged lower by 3 basis points at 7.04% from its previous close of 7.07%.
The Government of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore on September 28, 2012, which includes (i) ‘8.07 percent Government Stock 2017-JUL’ for a notified amount of Rs 4,000 crore (nominal) through price based auction; (ii) ‘8.33 percent Government Stock 2026’ for a notified amount of Rs 6,000 crore (nominal) through price based auction; (iii) ‘8.97 percent Government Stock 2030’ for a notified amount of Rs 3,000 crore (nominal) through price based auction; and (iv) ‘8.33 percent Government Stock 2036’ for a notified amount of Rs 2,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method.
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