Bond yields were trading lower on Tuesday amid easing wholesale inflation. India’s inflation based on wholesale price index (WPI) declined further to 3.85% for the month of February 2023 against 4.73% recorded in January 2023, on account of fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment and motor vehicles, trailers & semitrailers. The wholesale inflation was 4.95% in December 2022.
In the global market, U.S. Treasury yields tumbled on Monday as the collapse of Silicon Valley Bank prompted investors to drastically scale back expectations of a big Federal Reserve rate hike and seek the safety of government debt. Furthermore, Oil prices slid on Monday as the collapse of Silicon Valley Bank roiled equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.35% from its previous close of 7.36% on Monday.
The benchmark five-year interest rates were trading 2 basis points higher at 7.31% from its previous close of 7.29% on Monday.