Bond yields trade higher on Tuesday

Bond yields edged higher on Tuesday, as investors largely stayed on the sidelines in the absence of any major triggers and after a sharp rally in recent days. However, underlying sentiment remains bullish amid comfortable cash position and expectations that the country's parliament may soon approve the key tax reform bill.

In the global market, US Treasury yields rose on Monday as Microsoft Corp launched the fifth largest corporate bond offering of all time, drawing appetite away from safe-haven U.S. government debt, and on profit-taking. Furthermore, US crude slipped below $40 per barrel for the first time since April, as oil prices settled down nearly 4% on heightened worries of a crude glut despite peak summer fuel demand.

Back home, the yields on new 10 year Government Stock were trading 3 basis points higher at 7.16% from its previous close of 7.13% on Monday.

The benchmark five year yields were trading 3 basis points higher at 7.06% from its previous close of 7.03% on Monday.

The Reserve Bank of India has announced the auction of 91-days and 364-days Government of India Treasury Bills for notified amount of Rs 9,000 crore and Rs 6,000 crore respectively. The auction will be conducted on August 03, 2016 using ‘Multiple Price Auction’ method.