Yields closed higher • On Tuesday, the 10-year benchmark government bond (6.48% GS 2035) opened 1 bp lower at 6.65%. • Over the day, 10Y point elevated on short-selling amid caution ahead of the Union Budget for FY27 and tracking the sharp rise in 5Y OIS rate. • Meanwhile, the SDL auction came better than expected, however didn’t provide any respite to the bond yields. RBI offered 10Y Gujarat at 7.47% and 10Y Tamil Nadu at 7.50%. • The 10Y point ended 6bps higher at 6.72% vs 6.66%. • The latest banking system liquidity stands in surplus of ~INR 636 Bn.
