Bond yields edged higher on Monday, on account of lower demand from corporates and banks. However, losses were limited as some support came after BJP took comfortable leads in Gujarat and Himachal Pradesh elections, which is considered a prestige battle for Prime Minister Narendra Modi in his home state and a litmus test for new Congress president Rahul Gandhi.
In the global market, the margin between U.S. shorter-dated and longer-dated Treasury yields shrank to its smallest in a decade on Friday, based on traders' expectations that the Federal Reserve would increase short-term interest rates further and long-term inflation would stay tame. Furthermore, Oil markets were stable, hovering around Friday's levels as a lack of conclusive market indicators prevented prices from swinging either way.
Back home, the yields on new 10 year Government Stock were trading 3 basis points higher at 7.16% from its previous close of 7.13% on Friday.
The benchmark five-year interest rates were trading 3 basis points higher at 7.01% from its previous close of 6.98% on Friday.