Bonds off highs; debt switch uncertainty

The government bonds gave up early gains on profit-booking as dealers speculated on the timing of the Reserve Bank of India's debt switch.

The benchmark 10-year bond yield flat at 8.79 per cent, off 8.77 per cent early lows. Dealers talking about RBI announcing the possible 500 billion rupee debt switch soon.

Dealers also keenly awaiting details of whether RBI will conduct the debt switch via or off-market.

Traders see the 8.75 per cent level as key, preventing a further fall in yields. Traders will also be cautious of adding large positions ahead of factory output data on Friday and key inflation data next week.