Indian bond yield hovers near 7-wk low; t-bills eyed

MUMBAI, Nov 25 - Indian federal bond yields stayed close to their lowest in nearly seven weeks on Wednesday as demand for debt was supported by the absence of a bond auction this week and also as ample cash was directed towards debt.

* At 1:46 p.m., the yield on the 10-year Indian benchmark bond <IN069019G=CC> was at 7.18 percent, after falling to 7.17 percent its lowest since Oct. 8. It had ended at 7.21 percent on Tuesday.

* Dealers said the 10-year yield would remain in the range of 7.16-7.20 percent during the day and was unlikely to go above the previous closing level.

* There is no bond auction scheduled for this week and the supplies remaining in the fiscal year to March is just 640 billion rupees, which traders say would be adequately balanced by demand in the market.

* Traders said they were waiting for the outcome of the 70 billion rupee bond auction later in the day for cues.

* Cash levels in the banking system were abundant as banks parked 1.05 trillion rupees of bonds in the central bank's reverse repo window.

* In interest rate futures on the National Stock Exchange , the December contract <N10Z9> implied a yield of 8 percent, above its previous close of 7.8459 percent.

* The yield implied in the March contract <N10H0> was at 8.2534 percent, higher than its previous close of 8.2444 percent. ((neha.dsilva@thomsonreuters.com; Tel: +91 22 6636 9033; Reuters Messaging: neha.dsilva.thomsonreuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))