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Bond yields tread water in absence of immediate trigger

06 Dec 2012 Evaluate

Bond yields were trading steady, in absence of immediate trigger ahead of Rs 12,000 crore worth of bond sale on Friday, with all eyes now glued on decision of ‘FDI in Retail’ at Rajya Sabha,  a key to further reforms and lowering India's twin deficit. UPA government won a vote on allowing foreign supermarkets to operate in Asia's third-largest economy on Wednesday, after BSP and SP walked out.

On the global front, US Treasuries were firm in Asian trade on Thursday, with the yield on 10-year notes near a three-week low on concerns over the fiscal cliff as well as hopes for fresh easing steps by the Federal Reserve. Meanwhile, Brent crude held below $109 per barrel on Thursday, as niggling worries about the global economy and oil demand following subdued data from the United States and Europe countered supply fears stemming from festering Middle East tensions.

The yields on 10-year 8.79% - 2021 were trading flat at its previous close of 8.17%.

The benchmark five-year interest rates were trading lower by 2 basis points at 7.11% against its previous close of 7.13%.

The Government of India have announced the sale (new/re-issue) of three dated securities for Rs 12,000 crore on December 07, 2012, which includes (i) “a new 8-Year Government Stock 2020” for a notified amount of Rs 4,000 crore (nominal) through yield based auction; (ii) “8.20 percent Government Stock 2025” for a notified amount of Rs 6,000 crore (nominal) through price based auction; and (iii) “8.83 percent Government Stock 2041” for a notified amount of Rs 2,000 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 December 07, 2012 (Friday).

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