The yields on 10-year 8.79% - 2021 bonds were trading down by 1 basis point at 7.81% from its previous close of 7.82%
Bond yields were treading water with bond dealers looking for cues from the government's economic survey report due to be released in the afternoon. Further, caution was also witnessed ahead of the much awaited Union Budget, where the dealers await the fiscal deficit target and gross borrowing numbers for the next financial year starting in April.
On the global front, US Treasuries firmed in Asian trade, on Wednesday on political deadlock in Italy triggered by inconclusive elections and after Federal Reserve Chairman Ben Bernanke reaffirmed the central bank's commitment to monetary stimulus. Meanwhile, Brent crude oil, which fell under $113 a barrel on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and about future demand for fuel, was now trading above $113.
Back home, the yields on 10-year 8.79% - 2021 bonds were trading down by 1 basis point at 7.81% from its previous close of 7.82%.
The benchmark five-year interest rate swaps were trading unmoved at its previous close of 7.19% on Tuesday.
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 the government securities for an aggregate amount of Rs 10,000 crore on March 1, 2013 through multi-security auction using the multiple price method.
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