Bond yields edged higher on Friday, on account of lower demand from corporates and banks. However, losses were limited with exit polls predicting that Prime Minister Narendra Modi’s Bharatiya Janata Party would comfortably win Gujarat state elections.
In the global market, the gap between U.S. shorter-dated and longer-dated Treasury yields shrank on Thursday as surprisingly strong data on retail sales in November supported the view the Federal Reserve would raise interest rates further to keep the economy from overheating. Furthermore, oil markets were stable as the Forties pipeline outage in the North Sea and the ongoing OPEC-led production cuts supported prices, while rising output from the United States kept crude from rising further.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 7.14% from its previous close of 7.13% on Thursday.
The benchmark five-year interest rates were trading flat at its previous close at 6.98% on Thursday.