Benchmark 10-year bond yields rose to its highest level since end-April in early trade on Friday as investors sold debt amid rising geo-political tensions while higher global crude oil prices also weighed.
Traders are now awaiting the outcome of the Rs 14,000 crore debt sale for further direction.
The benchmark 10-year bond yield rose 3 basis points to 8.88%, its highest since April 28. The new 10-year paper also rose 3 bps to 8.66%.
Oil prices on both sides of the Atlantic rose more than $1 on Friday, with Brent nearing $107 a barrel after the United States approved air strikes against Islamic militants in Iraq, raising the threat of oil disruptions from the key oil producer.