Bond yields eased on expectations that the government would soon announce more steps to aid FDI inflows. The finance ministry in the coming week is expected to announce a major package next week as part of an all-out effort to curtail the widening current account deficit (CAD), comprising a combination of import compression, long-term external commercial borrowing and foreign capital flow management.
On the global front, U.S. Treasuries prices ended little changed on Tuesday after the Treasury's $32 billion three-year note sale drew solid demand. Meanwhile, brent crude futures slipped on Wednesday towards $108, dropping for a fourth straight day, as supply worries eased and on caution ahead of data from China and the United States, the world's two top oil consumers.
Back home, the yields on 10-year 7.16% - 2023 bonds eased 1 basis point at 8.19% from its previous close of 8.20% on Tuesday.
The benchmark five-year interest rate swaps were trading unchanged at its previous close of 8.39% on Tuesday.
The Government of India have announced the sale (Re-issue) of four dated securities for Rs 15,000 crore on August 08, 2013 (i) “8.12 percent Government Stock 2020” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “8.33 percent Government Stock 2026” for a notified amount of Rs 6,000 crore (nominal) through price based auction; (iii) “8.32 percent Government Stock 2032” for a notified amount of Rs 3,000 crore (nominal) through price based auction; and (iv) “8.30 percent Government Stock 2042” for a notified amount of Rs 3,000 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 08, 2013 (Thursday).
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