Central bond yields reportedly surged on Tuesday with the tightening of cash conditions. But, the risk aversion managed to endorse the demands globally.

The yield on the benchmark 10-year bond was observed to be 7.50%, rising from 7.48% last year.

Banks borrowed a sum worth Rs. 61,920 crore in total from the central bank on Monday through its liquidity adjustment auctions, depicting the extent of cash shortage due to 3G payments.

The food and fuel price data for Thursday will hold important as it can help in shaping up the expectations in the central bank policies.

The traders are also eyeing the results of Friday's bond auction.

Central Bank Deputy Governor Subir Gokarn said on Tuesday that food prices have been the main drivers for inflation in India and price pressures would begin to settle if the country receives a normal monsoon.

India Inc. announced on Monday that it plans to sell 110 billion rupees of bonds on June 11. Following this, the US Treasury prices jumped, on Monday.