Bond yields trade lower on Wednesday

Bond yields traded lower on Wednesday after Finance Minister Arun Jaitley made a fresh bid to end the deadlock on Goods and Services Tax (GST) bill as he reached out to main opposition Congress. Investors overlooked report that India’s merchandise exports contracted for the 12th straight month in November, fell by 24.4%, dropping to $20 billion mainly on account of a sharp fall in shipments of petroleum products, engineering products, gems and jewellery and oil meals.

In the global market, U.S. Treasuries prices fell on Tuesday as gains on Wall Street reduced the appeal of safe-haven bonds and stable consumer prices supported views that the Federal Reserve will raise interest rates on Wednesday. Furthermore, crude oil prices fell in Asian trade on Wednesday, snapping two days of gains that pulled crude back from testing 11-year lows, as investors awaited the outcome of a Federal Reserve meeting that will likely raise interest rates.

Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 7.75% from its previous close at 7.78% on Tuesday.

The benchmark five-year interest rates were trading 2 basis points lower at 7.77% from its previous close at 7.79% on Tuesday.