Bond yields eased on account of some buying in holiday shortened week. However, sentiments in markets continue to remain jittery as local media reports suggests that another party may withdraw support from the ruling coalition after the withdrawal of a key ally last week. Concerns that country’s reform agenda will slow or that the government may even be forced to call early elections largely counterbalanced the impact of the government's eased investment rules for foreign investors announced on March 23.
On the global front, US 10-year Treasuries edged lower on Tuesday, but losses were limited as investors worried that a contentious rescue scheme for Cyprus could become a template for resolving any future banking sector crises in the euro zone. Meanwhile, Brent crude remained steady above $108 a barrel on Tuesday on concerns the Cyprus bailout could set a new precedent in restructuring the euro zone banking sector, again feeding worries about the European economy and its demand for oil.
Back home, the yields on 10-year 8.79% - 2021 bonds eased 1 basis point at 7.94% from its previous close of 7.95% on Monday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 7.22% from its previous close of 7.24% on Monday.
The Reserve Bank of India has announced the auction of 182 and 91-days Government of India Treasury Bills for notified amount of Rs 5,000 crore and Rs 7,000 crore respectively. The auction will be conducted on March 26, 2013 using 'Multiple Price Auction' method.
