Bond yields traded higher on Wednesday despite World Bank in its Global Economic Prospects report has said that India's economy is estimated to contract by 9.6 per cent in the fiscal year 2020-21 (FY21), reflecting a sharp drop in household spending and private investment. Report said that the informal sector, which accounts for four-fifths of employment, has been subject to severe income losses during the COVID-19 pandemic. In India, the pandemic hit the economy at a time when growth was already decelerating.
In the global market yields on U.S. 10-year Treasury notes hit their highest since March in Asian trading as investors hedged against the risk of more U.S. fiscal spending and borrowing should Democrats win two crucial Senate seats. Furthermore, Brent oil prices rose to the highest since February after Saudi Arabia agreed to make bigger cuts in output than expected during a meeting with allied producers, while industry data showed U.S. crude stockpiles fell last week.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 5.89% from its previous close of 5.85% on Tuesday.
The benchmark five-year interest rates were trading 4 basis points higher at 5.07% from its previous close of 5.03% on Tuesday.