Bond yields edge lower on bond buying from insurance cos, pension funds

Bond yields edged lower on account of persistent buying interest from insurance companies and pension funds for longer-tenure bonds, with the central bank's additional liquidity support measures also underpinning sentiment. For further cues, traders will monitor the outcome of Rs 15,000 crore treasury bill auctions later today.

On an assessment of the prevailing liquidity conditions, Reserve Bank has decided to conduct variable rate auctions of (i) 7 day term repo for a notified amount of Rs 15,000 crores and (ii) 14 day term repo for a notified amount of Rs 60,000 crore on May 02, 2014 (Friday).

On the global front, US Treasury prices tumbled for a second straight session on Tuesday, pressured by a brighter US economic outlook, with the Federal Reserve expected to continue reducing its bond purchases and investors bracing for a strong jobs report later this week. Meanwhile, brent crude oil futures prices slipped on Wednesday, trailing a $1 drop in US crude as data due for release later in the day was expected to show inventories in the United States at a record high

Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 8.82% as compared to its previous close of 8.83% on Tuesday

The benchmark five-year interest rate swaps was trading 1 basis point lower at 8.36% from its previous close of 8.37% on Tuesday.

 The Reserve Bank of India has announced the auction of 91 and 364 days Government of India Treasury Bills for notified amount of Rs 9,000 crore and Rs 6000 crore respectively. The auction will be conducted on April 30, 2014 using 'Multiple Price Auction' method.

The Government of India announce the sale of Four dated securities for Rs 16,000 crore on May 2, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 4,000 crore, (ii) 8.28% Government Stock 2027 for a notified amount of Rs 7,000 and (iii) 9.20% Government Stock 2030 for a notified amount of Rs 3,000 crore and lastly (iv) 9.23% Government Stock 2043 for a notified amount of Rs 2,000 crore. The auctions will be conducted using uniform price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.