Bond yields remain steady on Wednesday

Bond yields traded flat on Wednesday as investors failed to solace with the report that the government is likely to meet its fiscal deficit target of 3.9 per cent of the GDP for the current financial year, largely on account of the latest round of excise duty hikes on oil products and marginal compression in expenditure.

In the global market, U.S. Treasury debt prices fell on Tuesday as a rally in Wall Street stocks and competing corporate bond supply led by Apple trimmed safe-haven demand for bonds, lifting benchmark yields further from their near 3-1/2-year lows set last week. Furthermore, Crude oil prices rebounded on Wednesday on the hope that a deal between Saudi Arabia and Russia to freeze oil output at January levels would lead to a wider pact among producers that could eventually see production cuts to support prices.

Back home, the yields on new 10 year Government Stock were trading flat from its previous close at 7.78% on Tuesday.

The benchmark five-year interest rates were trading 2 basis points higher at 7.77% from its previous close at 7.75% on Tuesday.