World stocks rose strongly for a third straight session of gains on Tuesday as investors bet that officials would add to measures to calm the euro zone debt crisis.
The benchmark Indian 10-year bond yield closed at 8.32%, up 1 basis point. It moved in a narrow 8.31% to 8.33%band during the day.
Total volumes on the central bank's electronic trading platform were low at R7,340 crore compared to the normal R9,000 crore dealt in a day. There have been no fresh triggers. So, the market continues to remain dull.
For some time, domestic bonds will track mostly global factors for direction, said Dinesh Ahuja, a fund manager with SBI Funds in Mumbai.
I don't expect to see markets move much until RBI changes its hawkish stance. We are almost near a peak on the 10-year bond yield, so there is not much upside left. Yields will start easing only when RBI stance changes, he added.
The Reserve Bank of India is widely expected by economists to raise rates again in October, after it clearly stated its preference for inflation management in its policy review in mid-September.The RBI has raised interest rates 12 times since March 2010.