Bond yields traded flat on Thursday, as S&P Global Ratings has slashed India's Gross domestic product (GDP) growth forecast to 9.5 percent for the current fiscal (FY21), from 11 percent earlier, and warned of risk to the outlook from further waves of COVID pandemic. It lowered the growth outlook saying that a severe second COVID-19 outbreak in April and May led to lockdowns imposed by states and sharp contraction in economic activity.
In the global market, ten-year Treasury yields inched higher but remained below 1.5% in muted trading on Wednesday, one day after Federal Reserve Chairman Jerome Powell reaffirmed in congressional testimony the central bank's view that rising inflation will likely be temporary. Furthermore, oil prices climbed after a sharp drawdown in U.S. crude and gasoline stocks reinforced optimism of a quick recovery in fuel demand and on doubts about the future of the 2015 Iran nuclear deal that could end U.S. sanctions on Iranian crude exports.
Back home, the yields on new 10 year Government Stock were trading flat with its previous close of 6.01% on Wednesday.
The benchmark five-year interest rates were trading 1 basis point lower at 5.64% from its previous close of 5.65% on Wednesday.
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