Bond yields trade lower on Thursday

Bond yields traded lower on Thursday after Reserve Bank of India (RBI) has raised the limits on foreign ownership of Indian government and state bonds by an aggregate of Rs 27,500 crore which could come into force in April and July, a move that could ease pressure on bond yields. The limit on the central government goes up by Rs 20,500 crore, and for state government it is at Rs 7,000 crore in two tranches.

In the global market, U.S. Treasury yields fell on Wednesday as traders piled on bets the Federal Reserve would raise interest rates gradually in the coming months in the wake of dovish comments from Fed Chair Janet Yellen. Furthermore, Oil futures fell in early Asian trade on Thursday amid renewed worries of global oversupply after official data showed U.S. crude inventories rose last week to a record for the seventh time in a row.

Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 7.46% from its previous close at 7.49% on Wednesday.

The benchmark five-year interest rates were trading 5 basis points lower at 7.52% from its previous close at 7.57% on Wednesday.