Reacting to the unexpected additional auction announcement of government securities worth Rs 4,000 crore, the bond market fell nearly 75- 80 paise on Monday. The move by the Reserve Bank of India (RBI) to announce another auction apart from the scheduled paper was viewed as negative by the bond players as they anticipated the government’s borrowing programme would be higher than the announced amount this year.The benchmark 7.59% government stock ended the trading session at Rs 97.82 with its effective yield at 7.91% as against the Friday’s close of 7.80%. The bond players expect a cut off yield of 7.90% for the 7.37% stock (2014), while for the long tenured 7.94% paper the expected yield is 8.35%.On liquidity front amount mopped by RBI has reduced to Rs 38,820 crore on Monday as against average of Rs 63,000 crore in recent past.
