MUMBAI: Indian government bond yields rose marginally in early session on Friday, after easing over the last two sessions, as focus shifted to the weekly debt auction.

The new 10-year benchmark 7.18% 2033 bond yield was at 7.1092% as of 10:10 a.m. IST, after ending the previous session at 7.1048%.

“Heavy profit taking from state-run banks and fresh supply has put a pause to bond rally for today,” a trader with a state-run bank said.

The benchmark yield had dropped by 10 basis points over the previous two sessions, and also posted its biggest single-session fall in over four months on Thursday.

Market sentiment was boosted on speculation over India’s inclusion in global bond indexes.

JPMorgan is likely to come out with a review on index inclusion by early October while a review for the FTSE global bond index is due before September end.

The Reserve Bank of India earlier this month sought views from market participants on the settlement of bonds via the Euroclear platform.

New Delhi aims to raise 310 billion rupees ($3.73 billion) through sale of bonds later in the day.

India bond yields seen little changed; oil price move eyed

The auction includes a liquid 14-year paper. Meanwhile, oil prices continued to rise, with the benchmark Brent contract rising to its highest level in 10 months, amid persistent supply worries.

India is one of the largest importers of the commodity. Inflation eased to 6.83% in August from 7.44% in July but remained above the central bank’s target band for second consecutive month.

The 10-year US Treasury yield remained elevated, even as the market expects the US Federal Reserve to maintain a status quo on interest rates next week.