MUMBAI: Indian government bond yields opened little changed on Wednesday, with the benchmark yield hovering around the key technical level of 7.08%, as traders await the end of the financial year and avoid placing large bets.

The benchmark 10-year yield was at 7.0815% as of 10:00 a.m. IST, after closing at 7.0908% on Tuesday. “Activity for the year is mostly done, with traders already settled with their portfolios, and hence any large move is unlikely for now,” a trader with a primary dealership said.

The current levels for the benchmark is a strong technical resistance and is unlikely to be broken unless there is some major negative trigger, traders said.

The recovery in the rupee further calmed nervous traders, after a drop to record lows on Friday led to a selloff in bonds, with foreign investors cutting positions aggressively. Market participants now await the auction of 340 billion rupees ($4.08 billion) worth of Treasury bills later in the day.

The central government has not cancelled any auction for the current quarter, even though the market was expecting such an action amid healthy cash positions.

Traders are also looking out for the borrowing calendar for the first-half of the next financial year, starting April, which is expected before the end of this week.

India aims to gross borrow 14.13 trillion rupees via a debt sale in the 2025 financial year, after borrowing a record 15.43 trillion rupees in the current fiscal.

India bonds not reacting to strong domestic growth, yields little changed

Traders will also keep an eye on borrowing by states after their fundraising crossed 10 trillion rupees for the first time ever on an annual basis this fiscal.

Meanwhile, US yields remained steady, with the 10-year yield moving in a narrow 4.20%-4.25% range, as the market awaits more cues to assess the timing and extent of Federal Reserve rate cuts in 2024.