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Bond yields ease, oil price increase eyed

Bond yields ease, oil price increase eyed
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First Published: Wed, Feb 06 2008. 12 03 PM IST
Updated: Wed, Feb 06 2008. 12 03 PM IST
Reuters
Mumbai: Indian federal bond yields edged lower on Wednesday, 6 February, tracking lower US Treasury yields, but investors stayed largely on the sidelines ahead of an announcement to raise fuel prices and auctions.
At 9:49am (0416 GMT), the 10-year federal bond yield was at 7.49%, below Tuesday’s close of 7.51%. Total volume was Rs15.9 billion ($401 million) on the Reserve Bank of India’s electronic platform.
US Treasury debt prices rose on Tuesday after data showed the pivotal US service sector contracted sharply last month, sending recession-wary investors to the safety of government bonds.
India may raise prices of petrol and diesel this week, an oil ministry source said on Monday, a move that would accelerate inflation. The government has not raised retail fuel prices in the last 20 months when global prices surged to record highs.
Traders were also eyeing fresh supplies this week.
The central bank will sell treasury bills worth Rs35 billion on Wednesday and market stabilisation scheme (MSS) bonds for Rs40 billion the following day. The government will auction Rs90 billion of federal bonds on Friday.
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First Published: Wed, Feb 06 2008. 12 03 PM IST