MUMBAI: Indian government bond yields eased on Monday in good volume, helped by the absence of a debt sale this week.
Expectations the central bank's next move will be an easing of monetary policy because of the global economic turbulence and slowing domestic growth also aided sentiment, traders said.
Benchmark 10-year bond yield was down 3 basis points at 8.34 percent. Traders expect the yield to move in a 8.30-8.40 percent range.
Total volume on the central bank's electronic trading platform was 49.80 billion rupees ($941 million), compared with 35 billion to 45 billion rupees normally dealt in the first two hours of trade.
"Some buying ahead of the December quarter-end and absence of auction during the week is pushing the yields down," said Shakti Satapathy, a fixed-income strategist at A.K. Capital.
"Unless some triggers from the additional government spending comes as a surprise, the benchmark yield should remain rangebound between 8.28 and 8.45 percent this week," he said.
Finance Minister Pranab Mukherjee sought parliamentary approval in November to spend a net additional 568.5 billion rupees in the current fiscal year to end-March 2012.
Traders are worried the government, which had increased its borrowing plan in September for the second half of the year, may further raise the borrowings to fund higher spending.
The benchmark five-year swap was steady at 6.95 percent, while the one-year rate dropped 2 basis points to 7.71 percent.
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