Bond yields edged lower on Thursday, as traders remained optimistic for a rate cut by Reserve Bank of India (RBI) after the industrial output growth dropped to 1.7 percent in May from 8 percent in the same month last year.
In the global market, U.S. Treasury yields fell on Wednesday after Federal Reserve Chair Janet Yellen dampened expectations for an interest rate hike later this year and in 2018, as she remained cautious about inflation. Furthermore, oil dipped as producer club OPEC said it expected demand for its crude to decline next year as rivals pump more, pointing to a market surplus in 2018 despite efforts to tighten supply.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.45% from its previous close of 6.46% on Wednesday.
The benchmark five-year interest rates were trading flat at its previous close at 6.57% on Wednesday.