Bond yields traded steady as investors’ remained cautious ahead of the Reserve Bank of India’s (RBI) monetary policy review on January 29, where it is widely expected to cut rates by 25 basis points (bps). Further, the government's intention to embrace the bulk price of diesel in its calculation of the wholesale price based (WPI) inflation index as early as in February is also weighing on bonds.
Further, on account of a local holiday, the bond market will remain closed on Friday i.e. January 25, 2013.
On the global front, US Treasury debt prices rose marginally on Wednesday with support from safe-haven buying on worries over the pace of global growth and uncertainty, given the United States is on track for divisive negotiations on spending cuts and the budget deficit. Meanwhile, Brent crude futures edged up and US crude dipped on Wednesday in choppy trading as improving British employment data lent support, while a lower economic growth forecast from the IMF limited gains.
Back home, the yields on 10-year 8.79% - 2021 were trading flat at its previous close of 7.86% on Wednesday.
The benchmark five-year interest rates were trading down by 1 basis point at 7.13% from its previous close on Wednesday.
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