Bond yields traded lower on Wednesday as SBI Business Activity Index declined to 101 as on January 17 from 109 in the week ended January 10. The latest reading, even as the country is in the midst of the third wave of the pandemic, is the lowest since November 15.
In the global market, the dollar was firm after a rip higher in U.S. yields vaulted it up sharply on the euro overnight, putting it back above support levels that have held for the past few months in anticipation of rising U.S. interest rates. Furthermore, oil prices rose for a fourth day to a seven-year high as an outage on a pipeline from Iraq to Turkey increased concerns about an already tight supply outlook amid worrisome geopolitical troubles in Russia and the United Arab Emirates.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.61% from its previous close of 6.62% on Tuesday.
The benchmark five-year interest rates were trading 2 basis points higher at 6.07% from its previous close of 6.05% on Tuesday.