Bond yields, which were trading lower in early deals on gains in US Treasuries after the Federal Reserve desisted from giving a timeline on its monetary stimulus tapering, perked up on RBI chief’s comment of consumer inflation remaining high.
Governor Duvvuri Subbarao said that the country's consumer price inflation is still high and growth has moderated. India's annual consumer price inflation picked up in June to 9.87%, after slowing for three straight months. Subbarao's comments further reduce hopes of a rate cut this year after the central bank's cash-draining steps have sent bond yield surging, raising concerns about economic growth and higher borrowing costs.
On the global front, U.S. Treasuries prices rose on Wednesday, reversing early losses after the Federal Reserve gave no hint of a pullback in bond buying at the end of a two-day policy meeting. Meanwhile, brent crude futures rose towards $108 a barrel on Thursday as economic data from the United States and China brightened the outlook for demand in the world's two largest oil consumers.
Back home, the yields on 10-year 7.16% - 2023 bonds were trading tad higher at 8.16% from its previous close of 8.15% on Wednesday.
The Government of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore on August 2, 2013 (i) “7.28 percent Government Stock 2019” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “7.16 percent Government Stock 2023” for a notified amount of Rs 7,000 crore (nominal) through price based auction;(iii) “8.28 percent Government Stock 2032” for a notified amount of Rs 3,000 crore (nominal) through price based auction, and (iv) “7.40 percent Government Stock 2035” 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 August 2, 2013 (Friday).
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