Bond yields trade flat with negative bias on Thursday

Bond yields were trading flat with negative bias in the range-bound session of trade on Thursday as rise in oil prices hurt sentiments. However, the yields have been receding in the previous few sessions amidst speculation that government may increase the investment limits for foreign portfolio investors, bringing alive debt markets that have stagnated over the past couple of months. Meanwhile, the yields edged lower in previous session on reports of continued investment by FIIs in debt market.

On the global front, benchmark U.S. Treasury debt yields fell from three-week highs on Wednesday, reversing earlier gains, as hopes over a proposed move to end fighting between Russia and Ukraine were clouded by doubts that peace would prevail. Meanwhile, brent crude slipped towards $102 a barrel on Thursday, reversing some of the sharp overnight gains, as U.S. industry data showed fuel stocks rose last week and raised fresh doubts about the strength of demand in the world's biggest oil consumer.

Back home, the yields on new benchmark 8.40%- 2024 bond was trading 1 basis point lower at 8.53% from its previous close of 8.54% on Wednesday.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 8.01% from its previous close of 8.00% on Wednesday.

The Government of India has announced the sale (re-issue) of four dated securities for Rs 12,000 crore on September 5, 2014, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 2000 crore, (ii) 8.60% Government Stock 2028 for a notified amount of Rs 6000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 2000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 2000 crore. The auctions will be conducted using multiple 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.