India bond yields slightly varied

Tuesday, 21 February 2012 11:18

MUMBAI: Indian federal bond yields were little moved early on Tuesday as traders were on the periphery awaiting clues on whether the Reserve Bank of India will announce a debt buyback this week to support a scheduled bond auction.

The RBI typically announces its plans for debt purchases via OMOs after market hours on Tuesdays.

The government has said it will sell 120 billion rupees ($2.44 billion) of bonds on Friday.

At 9:15 a.m. (0345 GMT), the 10-year benchmark bond yield was at 8.18 percent from 8.19 percent on Friday. The market was closed on Monday for a local holiday.

Traders said the continuing surge in global oil prices may also hurt bonds as India imports most of its oil requirements and any increase in oil prices adversely impacts domestic inflation. For stories on oil, click.

Bond traders will watch for the release of the first ever India's annual inflation data based on the consumer price index (CPI) on Tuesday, a move to monitor retail prices that is expected to make monetary policy more effective in addressing demand-driven pressures.