The benchmark 10-year bond yield continues to trade sharply lower, currently at 8.34 percent, down 56 basis points on the day.
Yield on the benchmark 10-year bond fell as much as 69 basis points to 8.21 percent as its price rose. It is headed for its biggest single day fall since at least 1998, if yields close down more than 51 basis points.
India took steps to support the beaten-down bond market by providing liquidity to the markets through prudential measures and announcing some buyback of longer-dated bonds.
However, traders say stability in the rupee will be the key for bonds from the medium-term perspective.