Bond yields were trading flat with negative bias in light trade on the last trading day of the financial year, wherein banks value their investment portfolio for balance sheet purposes, therefore largely staying away from the market. Prevailing cautiousness was also witnessed ahead of release of fiscal deficit data and current account deficit data to be released later in the day.
On the global front, US Treasuries were trading firmly on Thursday with the benchmark yield stuck near three-week low hit the previous day after Italy's soft bond auction fanned worries the euro zone's debt crisis could take a turn for the worse. Meanwhile, Brent futures held above $109 a barrel on Thursday on hopes of a revival in demand growth in the world's biggest oil consumer the United States following a surprise fall in product inventories, however, worries over Europe's debt problems limited gains.
Back home, the yields on 10-year 8.79% - 2021 bonds eased 1 basis point at 7.98% from its previous close of 7.99% on Tuesday.
The benchmark five-year interest rate swaps were trading 4 basis points lower at 7.20% from its previous close of 7.24% on Tuesday.
Further, in view of the anticipated large volume of banking transactions during the annual closing of accounts for Financial Year 2012-13, the Reserve Bank of India, in order to facilitate smooth and non-disruptive conduct of banking operations, has decided to conduct additional liquidity operations on March 28, 2013.