Bond yields were trading higher ahead of the sale of Rs 15,000 crore later in the day. However, hopes that steps of the government would prop up the rupee, restricted yields further momentum. The finance ministry in the coming week is expected to announce a major package 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. government debt prices rose on Wednesday as higher yields attracted buyers to the Treasury's 10-year note auction, the second of three Treasury coupon sales this week. Meanwhile, Brent crude edged towards $108 a barrel on Thursday, ending a four-day decline as robust Chinese data raised hopes that the world's No.2 economy is stabilising, but uncertainty over the outlook for U.S. stimulus capped prices
Back home, the yields on 10-year 7.16% - 2023 bonds were trading 3 basis points higher at 8.17% from its previous close of 8.14% on Wednesday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 8.38% from its previous close of 8.40% on Wednesday.
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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