By Anoop Agrawal Oct. 20 (Bloomberg) -- Indian bonds declined on speculation some investors sold to make room for new securities that will be offered at an auction today. Bonds ended a three-day advance on speculation investors also sold to benefit from a rally last week that pushed the benchmark 10-year yield to the lowest in almost seven months. The federal government will sell 100 billion rupees ($2.05 billion) of debt in the first sale for the second half of the fiscal year that ends in March. ``Investors are taking this opportunity to re-align their portfolio as profit-making opportunities have been few and far in between,'' said S. Srikumar, chief debt trader at state-owned Corporation Bank in Mumbai. ``Yields are expected to be higher at the auction.'' The yield on the most frequently traded 7.94 percent note due May 2021 rose 1 basis point to 8.01 percent as of 10:57 a.m. in Mumbai, according to the central bank's trading system. The price of the bond declined 0.10, or 10 paise per 100-rupee face amount, to 99.45. The government will offer 60 billion rupees of new six-year notes and 40 billion rupees of the 7.95 percent debt due 2032. To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

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