Yields Likely To Ease, Profit Sales To Follow

Yields on government securities may ease slightly on Monday after the auction results. But this will immediately be followed by profit sales.

Liquidity in the banking system will be comfortable as there is surplus liquidity of about Rs 8,000 crore. For most part of the week gilts will see rangebound trading.

The market sees 5.85 per cent as a key resistance level for the benchmark 9.81 per cent 2013 gilt.

Once the 10-year yield touches this level, selling pressure will top buying interest as players do not have the confidence to pierce the resistance level.

The 10-year gilt finished at 5.87 per cent on Saturday as against Wednesday