Bond yields edged marginally lower on Friday, on sustained demand from corporates and banks. However, the gains remained capped with the Reserve Bank of India’s (RBI) statement that its dividend to the government this year will be less than half of last year’s payout, raising concerns over New Delhi's fiscal management.
In the global market, U.S. Treasury long-dated yields dropped to six-week lows on Thursday, pressured by continued tensions between the United States and North Korea as well as weak economic data that reduced expectations of an interest rate hike in December. Furthermore, oil prices were little changed in early Asian trading after retreating in the previous session, weighed by ongoing global glut concerns despite a bigger-than-expected draw in U.S. crude inventories.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.49% from its previous close of 6.50% on Thursday.
The benchmark five-year interest rates were trading flat at its previous close at 6.49% on Thursday.