Bond yields were trading lower, tracking early gains in the rupee but foreign fund flows will be watched for cues. On the currency front, Indian rupee, after opening substantially strong and having pared some of its early gains, continued to trade strong, tailing the weakness of dollar against basket of major currency.
On the global front, US treasuries yields rebounded from three-month lows on Tuesday as pressure on stocks and emerging market assets eased, sapping safe-haven demand for US government debt. Meanwhile, brent crude rose above $106 a barrel pulled higher by gains in US benchmark oil after industry data showed a drop in inventories at the WTI contract's delivery point.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 8.67% from its previous close of 8.68% on Tuesday.
The benchmark five-year interest rate swaps were trading unchanged at previous close of 8.37%.
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.