Bond yields traded lower on Thursday amid an external member of the RBI's rate-setting panel Nagesh Kumar stated that conflict in the Middle East poses some immediate-term challenges for the Indian economy but is unlikely to dent long-term economic growth momentum.

In the global market, U.S. Treasury yields edged higher on Wednesday but came off their highest levels of the morning after the Trump administration pledged to ensure that oil markets are well supplied and energy shipments can transit through the Strait of Hormuz. Furthermore, oil prices ⁠rose on Wednesday as U.S.-Israeli strikes on Iran disrupted Middle East supplies, but the pace of gains slowed from past sessions after President Donald Trump suggested the U.S. Navy could escort vessels through the Strait of Hormuz.

Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 6.64% from its previous close of 6.66% on Wednesday.

The benchmark five-year interest rates were trading 1 basis point lower at 6.33% from its previous close of 6.34% on Wednesday.