Bond yields were steady on Monday as traders were reluctant to take fresh positions in the backdrop of heavy government debt supplies.
The benchmark 10-year bond yield ended at 7.01%, almost steady at Friday?s close of 7%. It traded in a tight band of 6.96-7.03% during the day.
Volumes were a moderate at Rs 5,935 crore on the central bank?s trading platform. The benchmark five-year interest rate swap ended at 6.35/40%, close to Friday?s close of 6.32/37%.
?The outlook on interest rate is a bit clumsy and the market is currently focusing on supplies,? said Mahendra Jajoo, head of fixed income at Tata Asset Management.
The rupee rose 0.6% to 47.6425 a dollar at the close. It may rise to 47.50 this week.
After the market closed on Friday, the Reserve Bank of India (RBI) said six states would sell Rs 7,500 crore of 10-year bonds on Tuesday and the government would sell Rs 9,500 crore of treasury bills on Wednesday.
The government will also be selling Rs12, 000 crore worth of debt this Friday. The government has so far sold over Rs 1.89 trn of bonds since the beginning of the fiscal year starting April.
Meanwhile, rupee climbed to a seven-week high as foreign funds bought more local shares than they sold for a 14th straight day, the longest stretch in two years.