Bond yields trade higher on Tuesday

Bond yields traded higher on Tuesday after the seasonally adjusted Nikkei Business Activity Index slowed to 51.3 in September from 51.8 in August, but remained above the 50-mark for the third straight month which separates contraction from expansion.

In the global market, U.S. Treasuries prices fell on Monday, with benchmark yields climbing from their lowest since April, as weak services sector data supported the view that the Federal Reserve is unlikely to raise interest rates soon, spurring investors to move into stocks from bonds. Furthermore, Crude oil prices rose in early Asia trade, adding to gains in the previous session, after Russia signalled it was willing to meet with other big oil producers to discuss the market following the decline in prices in the last quarter.

Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 7.52% from its previous close of 7.51% on Monday.

The benchmark five-year interest rates were trading 1 basis point higher at 7.62% from its previous close of 7.61% on Monday.

The Reserve Bank of India has announced the auction of 91-days and 182-days Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6,000 crore respectively. The auction will be conducted on October 07, 2015 using 'Multiple Price Auction' method.