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Indian government bond yields ended little changed on Wednesday as traders awaited fresh triggers, after falling earlier in the session tracking easing U.S. yields and oil prices.

The benchmark 10-year yield ended at 7.3212%, after closing at 7.3211% on Tuesday.

"There are no triggers at all for government bond markets and we may be in a very narrow range for some time now," said Ajay Manglunia, managing director and head of investment grade group at JM Financial.

The benchmark yield had dipped earlier in the day, as a fall in oil prices and U.S. yields supported buying sentiment for bonds.

However, most traders do not anticipate the yield to slip below 7.30%, and as a result, have increased short positions on the paper, traders said, noting that outstanding short positions in the benchmark bond rose above 100 billion Indian rupees ($1.21 billion).

The benchmark Brent crude contract was down 1.9% on the day, after dropping 4.4% on Tuesday, pressured by weak demand data from China and a gloomy economic outlook. [O/R]

U.S. 10-year Treasury yields fell on Tuesday, after rising for the last two weeks. It was at 3.70%, down 13 basis points this week.

Traders await the release of India's retail inflation data for December which is due next week. Reading last month showed inflation eased below 6% in November, its first such move in eleven months.

The Reserve Bank of India is mandated to keep inflation around 4%, with a tolerance level of 200 basis points on either side. The central bank hiked the repo rate by 225 basis points in 2022 to 6.25% in its fight against inflation.

The federal budget is likely due on Feb. 1, followed by the central bank's monetary policy on Feb. 8.