Bond yields traded flat on Tuesday as investors were cautious ahead of US elections which is due next week and US Federal Reserve meeting which starts today. However, investors got some comfort after data showed that the manufacturing sector growth in India hit a 22-month high in October, driven by a sharp and accelerated increase in new orders, purchasing activity and output. The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) - a gauge of manufacturing performance - rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country.
In the global market, U.S. Treasuries ended their worst month in almost two years on a firm note on Monday, after falling expectations of central bank accommodation sent sovereign debt yields higher globally this month and made U.S. bonds less attractive to foreigners. Furthermore, Oil prices edged higher from one-month lows in early trading after OPEC agreed on a long-term strategy that was seen as an indication the cartel was reaching a consensus on managing production.
Back home, the yields on new 10 year Government Stock were trading flat at its previous close at 6.87% on Friday.
The benchmark five-year interest rates were trading 1 basis point lower at 6.70% from its previous close of 6.71% on Friday.