Bond yields traded lower on Tuesday, as Credit rating agency ICRA’s report stated that the states may face a shortfall of Rs 2.7-3 lakh crore as Goods and Services Tax (GST) compensation from the Centre next fiscal. Out of that amount, the shortfall from cess collections will be at Rs 1.6-2 lakh crore.
In the global market longer-term U.S. Treasury yields tumbled and the yield curve flattened on Monday as investors turned cautious ahead of this week's Federal Reserve meeting and upcoming economic data.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 6.18% from its previous close of 6.20% on Monday.
The benchmark five-year interest rates were trading 1 basis point lower at 5.83% from its previous close of 5.84% on Monday.