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Bond yields edge higher ahead of Rs 14,000 crore debt sale

27 Sep 2013 Evaluate

Bond yields edged higher ahead of Rs 14,000 crore debt sale to be held in the later part of the day. Further, RBI chief Raghuram Rajan's comments on inflation still being high, also pressurized bonds, lead to a small sell-off in equity markets.

On the global front, U.S. Treasuries prices slipped on Thursday, reversing some of their recent gains, after new jobless claims dropped and stock markets edged higher. Meanwhile, brent crude dropped below $109 a barrel on Friday and was heading for its third straight weekly loss, as fading worries over Syria and Iran helped ease risks to supply from the Middle East.

Back home, the yields on 10-year 7.16% - 2023 bonds, were trading 5 basis points lower at 8.77% from its previous close of 8.72% on Thursday.

The benchmark five-year interest rate swaps were trading 4 basis points lower at 8.39% from its previous close of 8.35% on Thursday.

Government of India announced the sale of four dated securities for Rs 14,000 crore on September 27, 2013. (i) “8.12 percent Government Stock 2020” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “8.28 percent Government Stock 2027” for a notified amount of Rs 6,000 crore (nominal) through price based auction;(iii) “ New 17-yr Government Stock 2030” for a notified amount of Rs 2,000 crore (nominal) through yield 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 uniform price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on September 27, 2013 (Friday). 

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