Bond yields traded higher on Wednesday despite former finance secretary Subhash Chandra Garg statement that the Indian economy will shrink by 10 percent or Rs 20 lakh crore in current financial year (FY21), the first contraction in over 40 years, due to a faulty COVID lockdown. He said that FY21 will go down in the history of India as the year when India got way-laid from its story of three decadal outstanding growth.
In the global market, Longer-term U.S. Treasury yields were higher on Tuesday as investors looked for more bonds to be issued in response to the ongoing economic crisis. Furthermore, oil rose to a near three-month high amid optimism that major producers will extend production cuts as the world recovers from the coronavirus pandemic.
Back home, the yields on new 10 year Government Stock were trading 2 basis points higher at 6.01% from its previous close of 5.99% on Tuesday.
The benchmark five-year interest rates were trading 3 basis points higher at 5.48% from its previous close of 5.45% on Tuesday.