Bond yields traded lower after RBI has cut interest rate by 50 basis points on Tuesday. The central bank also hiked limit for FPI investment in government bonds to 5 per cent of the outstanding stock by March, 2018, a move that will bring in an additional Rs. 1.2 lakh crore in G-Sec.
In the global market, U.S. Treasuries prices rose on Tuesday, with benchmark yields touching their lowest levels in a month, as global equity prices fell to a two-year low on concerns about weak worldwide growth. Furthermore, Crude oil futures fell in early Asian trade on Wednesday after U.S. inventories showed a weekly buildup that far exceeded analyst expectations.
Back home, the yields on new 10 year Government Stock were trading 8 basis points lower at 7.53% from its previous close of 7.61% on Tuesday.
The benchmark five-year interest rates were trading 11 basis points lower at 7.61% from its previous close of 7.72% on Tuesday.