Indian government bonds traded in a narrow range early Tuesday, halting 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 the Reserve Bank of India's upcoming policy decision, with a hefty slate of state debt supply set to test market appetite.
The benchmark 6.94% 2036 bond yield was flat at 6.8346% as of 10:30 a.m.
IST, erasing early declines to close near previous levels.
The pause in buying interest reflects caution among traders who are weighing the potential impact of the central bank's monetary stance against the immediate liquidity drain from upcoming state government auctions.
The RBI's policy decision is expected to provide clarity on the rate path, but the timing coincides with a period of elevated supply.