Lower than anticipated net government borrowing announced in Union Budget for financial year 2010-11 helped government bond yields to soften a little on Friday providing a good selling opportunity for investors who wanted to make an exit.

Government bonds had been stressed over the past month amid expectations and concerns around the congress-led union government's borrowing plans for the next fiscal. Market expectations were pegged at a borrowing of nearly Rs. 360,000 crore. But Finance Minister Pranab Mukherji announced a figure of Rs. 345,000 crore in his budget.

The market wasted no time in holding on the selling opportunity that came their way due to the particular announcement and an unexpected hike in fuel prices. Yield on the 10-year benchmark eased up to 7.86 recovering from an intra-day low of 7.78 per cent.

However, as per Abheek Barua, Chief Economist of HDFC Bank, "With the budget and the net market borrowings figure out of the way, the market is likely to now focus on other negatives such as rising inflationary pressures and further monetary tightening."