MUMBAI: Indian federal bond yields are expected to open flat on Thursday in absence of fresh triggers while traders await the auction and buyback of securities on Friday by the Reserve Bank of India for direction.
Risk-on sentiment globally with the with Asian shares rising to a 2-month high and a firm euro after news that the International Monetary Fund was seeking to boost its resources to tackle the euro zone debt crisis weighed.
The central bank will on Friday buy back 8.07 percent 2017, 7.80 percent 2021, 8.08 percent 2022 and 8.28 percent 2032 bonds worth 120 billion rupees ($2.38 billion).
The bonds that are to be sold on Friday to raise 140 billion rupees are 40 billion rupees of 7.83 percent 2018 bond, 70 billion rupees of 8.79 percent 2021 bonds, and 30 billion rupees of 8.83 percent 2041 bonds.
The market has tempered its view on rate cut in the RBI's policy review on Jan. 24, after a spate of recent economic data pointed towards pick-up in growth as well as persistent pressure on non-food manufacturing prices.
The 10-year benchmark bond yield is expected to open flat and move in a range of 8.18 percent to 8.23 percent, traders said. On Wednesday, the yields settled 3 basis points lower at 8.19 percent.
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