Bond yields traded lower on Thursday

Bond yields traded lower on Thursday as investors turned optimistic on hope that Reserve Bank of India (RBI) will buy more bonds. The bonds staged a smart rebound following renewed demand from corporates and banks, after the Reserve Bank of India slashed key policy rates.

In the global markets, U.S. Treasury yields rose from one-month lows on Wednesday, led by longer-dated bonds as a rebound in oil and stock prices prompted investors to sell safe-haven government debt. Furthermore, Crude prices extended gains in Asia Thursday following a sizeable drop in US stockpiles, the first decline in seven weeks, indicating stronger demand in the world's top oil consumer.

Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.45% from its previous close at 7.46% on Wednesday.

The benchmark five-year interest rates were trading 2 basis points lower at 7.41% from its previous close at 7.43% on Wednesday.