Bond yields traded lower on Friday as investors were turning cautious ahead of the RBI monetary policy which is going to be held on February 02 2016. Sentiment got boost with Planning Commission's former deputy Chairman Montek Singh Ahluwalia statement that Indian economy, which expanded at 7.7 percent between 2003 and 2014 has the potential to clock 8 percent growth in the near future.
In the global market, U.S. Treasury prices ended higher on Thursday after weak data raised concerns about slowing U.S. economic growth, which offset higher inflation expectations as oil prices rebounded. Furthermore, Crude oil prices eked out minor gains on Asian trade Friday as the market adopts a cautious attitude considering the possibility that large oil producers may discuss a coordinated output cut to salvage prices.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 7.78% from its previous close at 7.80% on Thursday.
The benchmark five-year interest rates were trading 3 basis points lower at 7.62% from its previous close at 7.65% on Thursday.