Bond yields edged lower on Wednesday, on sustained demand from corporates and banks. Some support also came with report that India’s industrial production grew 4.9 percent in April, as compared with 4.4 percent jump in March. However, gains remained capped with report that that India’s retail inflation hit a four-month high after jumping to 4.87 percent in May from April’s 4.58 percent driven by costlier food and fuel.
In the global market, U.S. Treasury yields rose on Tuesday ahead of Wednesday's widely expected hike in interest rates by the Federal Reserve and after inflation data met economists expectations. Furthermore, Oil prices fell, pulled down by rising supplies in the United States and expectations that voluntary production cuts led by producer cartel OPEC could be loosened.
Back home, the yields on new 10 year Government Stock were trading 4 basis points lower at 7.93% from its previous close of 7.97% on Tuesday.
The benchmark five-year interest rates were trading 6 basis points lower at 7.95% from its previous close of 8.01% on Tuesday.