Bond yields rise ahead Rs 15,000 crore worth debt sale auction

Bond yields rose in early deals as investors made room for Friday's Rs 15,000 crore worth debt sale auction. However, bond prices also rose as market-men preferred to be on sidelines awaiting for industrial production and inflation data, scheduled to be released on Friday and Monday, respectively.

On the global front, US Treasury prices were steady in Asia on Thursday, taking a breather after benchmark yields briefly broke below key resistance at 1.8 percent overnight as investors awaited the latest developments in Europe as well as a 30-year bond offering. Meanwhile, Brent crude slipped below $113 on Thursday, after weaker-than-expected Chinese trade data that raised concerns over energy demand by the world's second-largest oil consumer. 

Back home, the yields on 10-year benchmark 8.79% - 2021 bonds rose to 8.59% from its previous close of 8.56% on Wednesday.

The Government of India has announced the sale of four dated securities for Rs 15,000 crore, which include, (i) “8.24 percent Government Stock 2018” for a notified amount of  Rs 4,000 crore (nominal) through price based auction, (ii) “8.79 percent Government Stock 2021” for a notified amount of  Rs 7,000 crore (nominal) through price based auction (iii) “8.28 percent Government Stock 2027” for a notified amount of  Rs 2,000 crore (nominal) through price based auction and (iv) “8.33 percent Government Stock 2036” for a notified amount of Rs 2,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on May 11, 2012 (Friday).

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 12,000 crore on May 11, 2012 through multi-security auction using the multiple price method.