The 10-year bond yield, 6.90% bond maturing 2019 closed at 7.35%, near Wednesday?s close of 7.37%.
The yield had risen to a high of 7.41% ahead of the release of inflation data, and then fell to a low of 7.34% on a smaller-than-expected rise in the annual rate.
Bond yields came off their highs to end steady on Thursday after a smaller-than-expected rise in inflation helped calm investor concerns on a possible tightening of monetary policy this month.
Traders were also waiting for cues from this week?s $2.2 billion bond auction on Friday, after a disappointing response last week where the sale was not fully covered. ?There are no triggers and the market is trading in a rangebound fashion, although there was some softening after inflation data,? said Sanjay Arya, deputy general manager, treasury at Bank of Maharashtra.
India?s headline inflation rose at a slower-than-expected 0.92% in the 12 months to October 3, although it still picked up from the previous week?s 0.7%.
Worries about an outside chance the Reserve Bank of India might raise interest rates at an October 27 review eased after the data.
?The market is not expecting any rate hikes in the policy but it may indicate that it is in a withdrawal mode,? Arya said.
The RBI governor said last week there was broad agreement that India needs to retreat from its easy monetary stance, but he has also warned of the risks in mistiming such a move.