MUMBAI: Indian government bond yields were a tad lower in early session on Monday, tracking a dip in oil prices that aided investor sentiment.

The benchmark 10-year govt bond yield was at 7.2983%, as of 0459 GMT, after closing slightly higher at 7.3077% on Friday.

Yields reacted to falling oil prices and opened at around 7.28% as there are no major domestic or global triggers, a treasury head at a state-run bank said.

We may see yields inching lower if oil continues to fall, but the 10-year is unlikely to break below the 7.25%-mark, they added.

During the day, yields are expected to move in the range of 7.27%-7.32%, dealers said. If yields go to the 7.26%-7.27% level, that may give some investors a good opportunity to book profits, a dealer at a private bank said.

Crude oil prices fell for the third consecutive session on Monday, with Brent down about 1% at $86.74 per barrel, after falling 8.7% last week on concerns about weakened demand in China and further U.S. interest rate hikes.

The movement in oil prices has a direct impact on local inflation as India is one of the largest importers of the commodity. India's retail inflation eased to a three-month low of 6.77% in October, raising bets that the Reserve Bank of India (RBI) may slow down its pace of interest rate hikes.

Most market participants now expect the central bank to opt for a lower 35-basis points hike in the next meeting in December, after three back-to-back 50-bps hikes. The RBI has raised the repo rate by 190 bps since May, to 5.90%.

Market participants also await minutes from the U.S. Federal Reserve's November meeting, which is due mid-week. (Reporting by Bhakti Tambe; Editing by Savio D'Souza)