Bond yields traded lower on Tuesday even after India’s direct tax collection soared 16 per cent to touch Rs. 4.75 trillion this financial year, showing continuity in revenue growth despite external headwinds.
In the global market, U.S. Treasury yields fell on Monday and the inversion in a key part of the yield curve contracted as investors waited for inflation data due on Wednesday for further clues on whether price pressures are continuing to moderate. Furthermore, oil prices eased 1% on Monday on the increasing likelihood of more U.S. interest rate hikes, but crude supply cuts from top oil exporters Saudi Arabia and Russia limited the losses.
Back home, the yields on new 10 year Government Stock were trading 5 basis points lower at 7.09% from its previous close of 7.14% on Monday.
The benchmark five-year interest rates were trading 4 basis points lower at 7.08% from its previous close of 7.12% on Monday.