Bond yields traded lower on Friday even after Moody's said India's economy is likely to grow by 12 percent in 2021 following a 7.1 percent contraction last year, as near-term prospects have turned more favourable. Domestic and external demand has been on the mend since the easing of restrictions, which has led to improved manufacturing output in recent months.
In the global market, the yield on the U.S. 10-year Treasury note on Thursday rose above 1.75% for the first time in 14 months after the Federal Reserve pledged to look past inflation and keep interest rates near 0% until at least 2024, then ticked lower after the release of mixed economic data. Furthermore, oil prices edged up, but were still down more than 8% for the week as a new wave of COVID-19 infections across Europe spurred fresh lockdowns and dampened hopes that an anticipated recovery in fuel demand would come soon.
Back home, the yields on new 10-year Government Stock were trading 1 basis point lower at 6.19% from its previous close of 6.20% on Thursday.
The benchmark five-year interest rates were trading 4 basis points lower at 5.76% from its previous close of 5.80% on Thursday.