INDIA BONDS-Bond yields seen lower tracking U.S. peers, oil prices

MUMBAI, Jan 4 (Reuters) - Indian government bond yields are expected to open lower on Wednesday, tracking a similar move in U.S. yields and oil prices.

The benchmark 10-year yield is likely to move in a 7.29%-7.34% range, a trader with a private bank said. The yield ended at 7.3211% on Tuesday.

Bond yields should dip, as global factors have turned somewhat favourable after we saw purchases from long-term investors yesterday, the trader added.

Oil prices tumbled on Tuesday, with the benchmark Brent crude contract falling 4.4%, pressured by weak demand data from China, a gloomy economic outlook and a stronger U.S. dollar. This is its biggest single-session drop in over three months.

IMF Managing Director Kristalina Georgieva added to the gloomy outlook, saying on Sunday that the economies of the United States, Europe and China were all slowing simultaneously, making 2023 tougher than 2022 for the global economy.

U.S. Treasury prices rose, and the 10-year yield eased on Tuesday, after rising for the last two weeks.

India bond yields dipped on Tuesday as investors sought out value purchases at the start of a new quarter and calendar year.

This comes even as Indian states announced a record quarterly borrowing plan, planning to raise 3.41 trillion Indian rupees ($41.19 billion) in January-March.

States are likely to borrow lower than the scheduled quantum, which will help keep the spread between state and central government bond yields in check, analysts said.

Kotak Mahindra Bank expects the 10-year yield to move in the 7.30%-7.40% range in the near term and said a higher Treasury Bill calendar in January-March is expected to weigh.

New Delhi to auction T-Bills worth 290 billion rupees to 300 billion rupees per week this quarter, including the first such auction later in the day. KEY INDICATORS: ** Brent crude futures down 0.2% at $81.95 per barrel, after falling 4.4% in previous session ** 10-year U.S. Treasury yield was at 3.7314% and the two-year note at 4.3679% ** RBI to auction Treasury Bills worth 300 billion rupees ($1 = 82.7840 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)