Bond yields edged lower on Tuesday, on sustained demand from corporates and banks. However, gains remained capped ahead of Reserve Bank of India’s (RBI) two-day policy meeting outcome.
In the global market, U.S. Treasury yields dropped on Monday but remained higher than their levels late on Friday, boosted by increased confidence that the U.S. Congress would enact tax cut legislation after the Senate passed a bill early Saturday. Furthermore, oil markets rose in early Asian trade, buoyed by expectations of a drop in U.S. crude stockpiles and after last week's deal between OPEC and other crude producers to extend output curbs.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 7.06% from its previous close of 7.08% on Monday.
The benchmark five-year interest rates were trading 2 basis points lower at 6.88% from its previous close of 6.90% on Monday.