Bond yields, after hitting December 2009 lows in the previous session, eased more on Thursday on account of bullish sentiment, widely seen after headline inflation numbers came below 5%, which in turn intensified rate cut hopes.
On the global front, US Treasuries were firm in Asia on Thursday after soft manufacturing and subdued inflation figures pulled the benchmark yield off its two-month high in the previous session. Meanwhile, Brent futures slipped towards $103 a barrel on Thursday as a sharper-than-expected drop in US factory output muddied the outlook for demand, but a surprise drawdown in crude stockpiles in the world's top consumer helped stem the slide.
Back home, the yields on 10-year 8.79% - 2021 bonds were trading 2 basis points lower at 7.44% from its previous close of 7.46% on Wednesday.
The benchmark five-year interest rate swaps were trading steady at its previous close of 6.75% on Wednesday.
The Government of India have announced the sale (re-issue / issue) of four dated securities for Rs 15,000 crore on May 17, 2013, which includes, (i) “7.83 percent Government Stock 2018” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “New 10 – year Government Stock 2023” for a notified amount of Rs 7,000 crore (nominal) through yield based auction; (iii) “8.97 percent Government Stock 2030” for a notified amount of Rs 2,000 crore (nominal) through price based auction, and (iv) “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 multiple price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on May 17, 2013 (Friday).
