Bond yields edged lower on Thursday as India’s inflation based on wholesale price index (WPI) rose 0.26 per cent in November from a year ago driven by the increase in prices of food articles, electricity, computer, electronics & optical products, motor vehicles, other transport equipment and other manufacturing etc. In October, the WPI inflation was -0.52 per cent.
In the global market, U.S. Treasury yields dropped on Wednesday after the Federal Reserve held interest rates steady, as expected, but flagged in its new economic projections that its tightening policy is ending and rate cuts are on the horizon next year. Furthermore, Oil prices edged up about 1% on Wednesday from a five-month low in the prior session on a much bigger-than-expected weekly withdrawal from U.S. crude storage.
Back home, the yields on new 10 year Government Stock were trading 6 basis points lower at 7.19% from its previous close of 7.25% on Wednesday.
The benchmark five-year interest rates were trading 10 basis points lower at 7.11% from its previous close of 7.22% on Wednesday.