Bond yields rose a bit on Wednesday as traders made position for fresh paper ahead of Rs 15000 crore debt sale auction on October 7, 2011. The mood also remained cautious before market holiday on Thursday, meanwhile, the market sentiment remained subdued following a big increase in government borrowing for the October to March period, announced last week.
On the global front, U.S. Treasuries prices dropped on Tuesday after the Federal Reserve chairman reiterated the U.S. central bank is ready to take more steps to help the economy, reducing investor anxiety and the safe-haven allure of bonds. Meanwhile, brent crude rebounded above $102 on Wednesday as tighter U.S. crude stocks and promises by the Federal Reserve to launch new stimulus measures if necessary helped halt a sharp three-day sell off.
The yields on 10-year benchmark 7.80% - 2021 bonds were trading at 8.55%, marginally higher from Tuesday's close of 8.54%.
The benchmark five-year interest rate swap were trading at 7.07%, lower from Tuesday’s close of 7.08%
The Government of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore on October 7, 2011 (i) “8.07 percent Government Stock 2017” for a notified amount of Rs 3,000 crore (nominal), (ii) “8.08 percent Government Stock 2022” for a notified amount of Rs 6,000 crore (nominal) (iii) “8.28 percent Government Stock 2027” for a notified amount of Rs 3,000 crore (nominal) and (iv) '8.30 percent Government Stock 2040' for a notified amount of Rs 3,000 crore (nominal) through price based auctions.
The Reserve Bank of India has announced the auction of 91-day and 364-day Government of India Treasury Bills for notified amount of Rs 4,000 crore each respectively. The auction will be conducted on October 5, 2011 using 'Multiple Price Auction' method.
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