Indian markets fell on Tuesday amid concerns over increased tensions after Pakistan said Indian military jets crossed the Line of Control frontier in the disputed Kashmir region early in the day.
The rupee fell to 71.27 to the dollar compared with Monday's close of 70.9850. Indian bonds opened slightly late after a technical glitch on the trading and clearing platform early morning. The 10-year benchmark bond yield rose to 7.61 percent compared with 7.58 percent on Monday.
The broader NSE Nifty declined 0.7 per cent.
"People don't want to run position during such uncertain times," said a dealer at a foreign bank.
"Had this strike not been there, bond yields would have been lower as crude is down."
India's defence ministry said on Tuesday that it had no information about Pakistani allegations that Indian aircraft violated Pakistani airspace.