By 11 a.m. (0530 GMT), 10-year bond yield was at 8.32 percent, unchanged from Tuesday after moving in a three point range.
Total volumes on the central bank's electronic trading platform were lower at 19.65 billion rupees ($401 million), compared with normal 35 billion to 45 billion rupees dealt in the first two hours of trade.
"Euro zone is keeping everyone guessing," said Anoop Verma, an associate vice president with Development Credit Bank. "Unless there is some concrete solution emerging from here, the market will be rangebound."
Traders said the 10-year yield would move in a 8.20-8.40 percent range until there was clarity on the solution to either the euro zone troubles or until the central bank changed its hawkish stance.
"Tomorrow's borrowing meeting could be a non-event if they do not announce any additional borrowing. I expect extra borrowing if any, will be announced only in February," the head of trading at a private bank said.
New Delhi, which set a gross borrowing target of 4.17 trillion rupees for 2011/12, has completed borrowing 2.5 trillion between April and September.
"One needs to see who wins, the global factors which can push yields down or an hawkish RBI looking to raise rates again in October and pushing yields up," the head dealer said.
The Reserve Bank of India is widely expected by economists to raise rates again in October, after it reiterated fighting high inflation remained its priority at its policy review in mid-September.
The RBI has raised interest rates 12 times since March 2010, ranking it among the most aggressive central banks in the world.
Traders said near-term swap rates were factoring in rate cuts going ahead. The one-month OIS rate was at 8.20 percent, below the central bank's repo or key lending rate of 8.25 percent.
The benchmark five-year Indian swap rate was steady at 6.85 percent while the one-year rate was 2 bps lower at 7.78 percent.
Traders said they would watch the movement in global oil prices for cues on its impact on domestic inflation.
Brent crude fell below $107 on Wednesday, after sharp gains a day earlier, weighed down by a stronger dollar as investors sought refuge in the greenback amid lingering concerns over a debt crisis in the euro zone.
The euro was steady versus the dollar on Wednesday, holding above an eight-month low hit earlier this week, as investors clung to hopes European leaders were making progress on a major debt deal, even if it was behind the scenes.
US Treasuries prices fell on Tuesday with benchmark yields touching 2 percent as hopes for a bigger bailout fund in Europe dampened safe-haven demand for bonds and stoked bids for stocks and other risky assets.
In Asian trade however, the 10-year US benchmark bond yield was at 1.96 percent, down 3 basis point from late New York trade.