Bond yields edged a bit higher on Wednesday in absence of any Open Market Operation (OMOs) announcement from central bank on Tuesday, which sapped the demand of safe haven bonds. However, yields are expected to remain capped as traders still see the prospect of an announcement.
On the global front, US 10-year Treasuries struggled to regain ground in Asian trade on Wednesday after retreating the previous day on optimism that lawmakers will reach a deal to avoid a fiscal crisis that could dent economic growth. Meanwhile, Brent crude rose above $110 per barrel on Wednesday on fears of supply disruption from the Middle East as clashes raged between Palestinians and Israelis despite overnight truce talks.
The yields on 10-year 8.79% - 2021 were trading 1 basis point higher to 8.21% from its previous close of 8.20% on Tuesday.
The benchmark five-year interest rates were trading flat from previous close of 7.17%.
The Reserve Bank of India has announced the auction of 91-day and 182-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on November 21, 2012 using 'Multiple Price Auction' method.
The Government of India have announced the sale (re-issue) of three dated securities for Rs 13,000 crore on November 23, 2012 (i) “8.19 percent Government Stock 2020” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “8.20 percent Government Stock 2025” for a notified amount of Rs 7,000 crore (nominal) through price based auction; and (iii) “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 November 23, 2012 (Friday).
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