Bonds fell for a third day, the longest stretch in almost a month, before the government auctions Rs 10,000 crore of debt later this week.
Yields on the most-traded securities due 2019 rose to the highest level in more than two weeks as India prepares to sell bonds maturing in 2016, 2019 and 2032.
?Sentiment is weak and some portfolio adjustments are happening before the auction,? said Mukesh Kumar, a fixed-income trader at State Bank of Bikaner & Jaipur.
The yield on the 6.9% note due July 2019 rose 7 bps to 7.33% at the close.
The benchmark yield may move in a range of 7.25 to 7.35% this month, Kumar said.
Rupee rose the most in more than two weeks on speculation that accelerating growth will boost the attraction of the nation?s assets for overseas investors.
The local currency and benchmark Index both advanced for a second day after a government report showed Asia?s third-largest economy grew at the fastest pace in six quarters in the three months ended September 30.
?The undertone has turned positive for the rupee after the recent economic data and this is unlikely to turn in the short- term,? said Sudarshan Bhatt, chief trader at Corporation Bank. The rupee climbed 0.4% to 46.3150 a dollar at the close.
The Reserve Bank of India may withdraw more stimulus measures by the end of the year after Asia?s third-biggest economy grew at the fastest pace in six quarters.