Bond yields edged lower, with safe haven bonds gaining momentum on risk aversion in emerging markets after data showed US manufacturing activity slowed sharply. However, further fall was limited on account of Rupee’s weakness. On the currency front, Indian rupee after opening weak was trading downbeat on account of dollar demand from banks and oil importers in view of its strength in the overseas market.
On the global front, U.S. Treasuries yields fell to their lowest levels since the beginning of November on Monday after a report showed that U.S. manufacturing grew at a substantially slower pace in January. Meanwhile, Brent hovered at around $106 a barrel on Tuesday as a frigid winter boosted heating oil demand in Europe and the United States, offsetting weak economic data from the US and China.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 8.71% from its previous close of 8.73% on Monday
The benchmark five-year interest rate swaps were trading lower by 1 basis point at 8.41% from its previous close of 8.42% on Monday.
The Reserve Bank of India has announced the auction of 364-days and 91-days Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 7000 crore respectively. The auction will be conducted on February 5, 2014 using 'Multiple Price Auction' method.
The Government of India has announced the sale (re-issue) of three dated securities for Rs 10,000 crore on February 7, 2014, including (i) 8.12% Government Stock 2020 for a notified amount of Rs 3,000, (ii) 8.83% Government Stock 2023 for a notified amount of Rs 5,000 and lastly (iii) 8.32% Government Stock 2032 for a notified amount of Rs 2,000.