Bonds yields traded higher on Friday as investors turned cautious as RBI Governor Raghuram Rajan shot down Niti Aayog chief Arvind Panagariya's suggestion to raise the central bank's inflation target, while pointing out that the country's macroeconomic fundamentals were stable.
In the global market, U.S. Treasuries prices fell on Thursday with benchmark yields rising from3-1/2-month lows as a rebound on Wall Street and in the oil market scaled back appetite for low-risk government debt, but jitters remained on further losses in those sectors. Furthermore, Oil prices rose for a second session on Friday, moving further away from 12-yearlows plumbed earlier this week, as cold U.S. and European weather as well as firmer financial markets gave some traders reason to cash in on record short positions.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 7.75% from its previous close at 7.74% on Thursday.
The benchmark five-year interest rates were trading flat from its previous close at 7.63% on Thursday.