Bond yields edge lower on profit-booking; buying from banks prevents further losses

Bond yields were trading higher on some profit-taking after the yield hit a seven-week low in the previous session and posted its biggest single-day fall since mid-April. Nevertheless, buying from banks and large institutional players has restricted further losses in bond prices. On the global front, US Treasuries fell on Monday after economic data signaled unexpectedly strong growth in the US services sector, surrendering early gains made on a flight to safety spurred by tensions in Ukraine. Meanwhile, brent crude held steady below $108 per barrel on Tuesday as clashes across Ukraine helped support a market that might otherwise buckle from ample supply especially in the United States, the top oil consumer. Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points higher at 8.76% from its previous close of 8.74% on Monday. The benchmark five-year interest rate swaps was trading 3 basis points higher at 8.33% from its previous close of 8.30% on Monday The Reserve Bank of India has announced the auction of 91 and 182 days Government of India Treasury Bills for notified amount of Rs 9,000 crore and Rs 6000 crore respectively . The auction will be conducted on May 7, 2014 using 'Multiple Price Auction' method. The Government of India announce the sale of Four dated securities for Rs 16,000 crore on May 9, 2014, including (i) 7.80% Government Stock 2020 for a notified amount of Rs 4,000 crore, (ii) 8.83% Government Stock 2023 for a notified amount of Rs 7,000 crore, (iii) 8.32% Government Stock 2032 for a notified amount of Rs 2,000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 3,000 crore on May 9, 2014.