"The secondary market for securities continued to encounter selling pressure causing bond prices to fall drastically across all maturities. The medium tenor papers and the longer maturities declined by around 40 paise on an average," a dealer said, adding that the political scenario along with developments in some co-operative banking firms helped wayward movements in the G-Secs market.

The benchmark 11.40 per cent 2008 paper fall by 90 paise and closed at Rs 107.90 while the 12.50 per cent 2004 closed at Rs 108.50 and 11.30 per cent 2010 at Rs 107.65. There was comfortable liquidity in the system on Tuesday, but advance tax outflows from Thursday would reduce liquidity in the system.

On the National Stock Exchange's (NSE's) wholesale debt segment, trades worth Rs 2,425 crore were seen. Trades worth Rs 680 crore were seen in the 11.40 per cent 2008 paper while those in the 12.50 per cent 2004 and 11.30 per cent 2010 stood at Rs 330 crore and Rs 315 crore respectively. Meanwhile, the Reserve Bank of India accepted two bids for Rs 140 crore at its repos-auction at the cut-off rate of seven per cent.