Indian government bonds traded in a narrow range early Tuesday, pausing a three-session rally that had seen the benchmark 10-year yield fall by 7 basis points.
Market participants are holding back on new positions ahead of a large state debt sale, which is expected to inject significant supply into the market and test demand levels.
The benchmark 6.94% 2036 note saw its yield dip slightly, but trading activity remained subdued as investors assessed the impact of the upcoming auction.
The benchmark 6.94% 2036 note saw its yield dip slightly, but trading activity remained subdued as investors assessed the impact of the upcoming auction.
This marks the second consecutive session of range-bound trading, signaling that the four-week rally driven by rising oil prices has lost momentum.
The pause comes as traders weigh the potential for yield volatility against the backdrop of geopolitical tensions in the Strait of Hormuz.
The recent rally in Indian bonds was largely fueled by safe-haven flows amid escalating shipping risks and higher crude prices.