Bond rally runs into supply wall, RBI meet

GOVERNMENT BONDS GAINED on Tuesday after the US-India trade-pact sparked fresh buying, but gains were capped as the news created a rare opportunity for profit-taking in a supply-heavy market.

- KHUSHI MALHOTRA

Traders stayed cautious ahead of full details and said weak demand-supply dynamics still dominated the sentiment in the debt market.

The 10-year benchmark yield fell 4 basis points to 6.7245, with some traders using the window to lock in gains. The yield had closed at 6.7662% on Monday, its highest level in more than a year.

Bonds have been battered since the Budget projected record gross market borrowing in the next fiscal.