Bond yields traded higher on Tuesday after Finance Minister Nirmala Sitharaman said an increase of 35.4 per cent in the capital expenditure outlay for Union Budget 2022-23 to Rs 7.50 lakh crore.
In the global market, yields of U.S. Treasuries that are most sensitive to inflation expectations hovered near their highest levels since February 2020 on Monday, capping a bond market selloff this month that by some measures is the worst in 13 years. Furthermore, oil prices edged higher, trading near seven-year highs hit last week, as investors bet supplies will stay tight, with a limited production hike by major oil producers and a strong post-pandemic recovery in fuel demand.
Back home, the yields on new 10 year Government Stock were trading 17 basis points higher at 6.85% from its previous close of 6.68% on Monday.
The benchmark five-year interest rates were trading 16 basis points higher at 6.19% from its previous close of 6.03% on Monday.