Bond yields traded lower on Tuesday, after domestic credit ratings agency Crisil has cut India’s gross domestic product (GDP) growth forecast to 9.5 per cent for the current fiscal (FY22) as compared to 11 percent projected earlier due to the hit to private consumption and investments following the second wave of COVID-19. It joins other watchers who have cut their FY22 growth projections, with some pegging it as low as 7.9 percent. The economy had contracted by 7.3 percent in FY21.
In the global market traders left U.S. Treasury yields little changed on Monday as they waited on the results of upcoming government bond auctions, while a Federal Reserve reverse repurchase facility took in a record amount of money. Furthermore, oil prices lost more ground as concerns about the fragile state of the global recovery in demand for crude and fuels were heightened by data showing China's oil imports fell in May.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 6.00% from its previous close of 6.02% on Monday.
The benchmark five-year interest rates were trading 4 basis points lower at 5.51% from its previous close of 5.55% on Monday.