Bond yields edge lower on bargain buying

Bond yields edged lower on bargain buying activities after previous two sessions of drubbing on bonds after the central bank's plan to cut the mandatory statutory liquidity ratio sparked fears about new supply at a time when India plans to raise Rs 647000 crore through market borrowings in the fiscal year ending in March 2015. Going forward, Foreign investors will hold the key for near term trend in debt markets.

On the global front, U.S. Treasuries prices got a strong lift on Wednesday from rising tensions over Ukraine that stung global financial markets but they ended with just modest gains as Wall Street steadied after a selloff. Meanwhile, Brent crude held steady below $105 a barrel on Thursday, as a decline in U.S. oil inventories was balanced by a glut in global markets.

Back home, the yield on soon to be benchmark 8.40%- 2024 bond were trading 1 basis point lower at 8.63% from its previous close of 8.64% on Wednesday.

The yields on existing benchmark 2023, 10-year Government Stock were trading 3 basis poinst lower at 8.84% from its previous close of 8.87% on Wednesday.

The benchmark five-year interest rate swaps were trading 3 basis points lower at 8.08% from its previous close of 8.11% on Wednesday.

The Reserve Bank of India has announced the auction of 364 and 91-days Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 9000 crore respectively. The auction will be conducted on August 06, 2014 using 'Multiple Price Auction' method.

The Governments of India have announced the sale (re-issue) of four dated securities for Rs 14,000 crore on August 8, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 2000 crore , (ii) 8.60% Government Stock 2028 for a notified amount of Rs 7000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 2000 crore and (iv) 8.30% Government Stock 2042 for a notified amount of Rs 3000 crore