Bond yields traded lower on Tuesday even after private report stating that Indian retail inflation likely eased to 5.50% last month (September), within the Reserve Bank of India's (RBI) tolerance band, on moderating food price rises and government subsidies that offset a surge in the cost of crude oil.
In the global market, U.S. Treasury futures rose on Monday on expectations that investors will buy bonds as a safe haven during the conflict in the Middle East and as Federal Reserve officials made dovish comments. Furthermore, oil prices jumped on Monday morning after a surprise attack on Israel by the Palestinian Islamist group Hamas fueled concerns of broader conflict breaking out in the Middle East region.
Back home, the yields on new 10 year Government Stock were trading 4 basis points lower at 7.39% from its previous close of 7.43% on Monday.
The benchmark five-year interest rates were trading 4 basis points lower at 7.34% from its previous close of 7.38% on Monday.