Bond yields traded lower on Friday despite Reserve Bank of India's article stating that investment activity is gaining momentum and the envisaged capital expenditure is set to jump by over 80 per cent to Rs 1.71 lakh crore in the current fiscal (FY24). It also said improvement in capacity utilisation of the manufacturing sector, pick-up in credit demand and improving consumer sentiments are helping the capex cycle.
In the global market, the US treasury yields widened further on Thursday as the Federal Reserve’s July meeting minutes have increased expectations of another possible rate hike. Furthermore, oil prices rose on Thursday after falling for three straight sessions, as the dollar weakened and China's central bank sought to bolster the property market and wider economy.
Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 7.22% from its previous close of 7.25% on Thursday.
The benchmark five-year interest rates were trading 2 basis points lower at 7.22% from its previous close of 7.24% on Thursday.