| The rupee turned weak against the dollar as overseas investors sold some investments in equities. The rupee selling in the offshore market also had an impact on the currency. |
| The equity market saw some outflows from institutional investors with the Sensex closing 90 points down from its Friday's level. |
| The spot rupee opened around 40.46 but closed lower at 40.56 to a dollar. The negative stock market trend has a impact on the rupee level, said a dealer. The rupee reached an intraday low of 40.43. |
| The annualised premium for six-month and one-year forward dollars closed around 1.75 per cent and 1.80 per cent, respectively. |
| Money: Funds under pressure |
| Liquidity remained tight in the system and the RBI absorbed around Rs 3,745 crore from the system today. Outflows on account on advance tax had an impact on resource levels. Interest rates in the CBLO market ruled above 6 per cent, wherein market players borrow funds by pledging government securities as collateral, unlike call market "" which is non-collateralised. |
| G-sec: Await Fed cues |
| Traders trimmed their positions a day before US Federal Reserve announces its decision on key interest rate. The activity was restricted to few securities in the benchmark maturity of 5- year and 10- year. The yield on the benchmark 10-year paper (7.99 per cent bond) closed at 7.86 per cent compared with 7.85 per cent on Friday last week. The market on the negotiated dealing platform of the RBI clocked volumes of Rs 2,260 crore. |
| OIS and corporate bonds: Poor volumes |
| Trade was lacklustre today as investors stayed away on fears that liquidity may tighten following advance tax outflows this week. |
| Around Rs 30,000 crore are estimated to have been drained from the banking system today towards the second instalment of corporate advance tax payment. |
| Investors avoided taking positions in long-term papers as nobody wants to take a long term view and trade in the secondary market as there is no clarity about liquidity prevailing in the system, said a dealer with a public sector bank. |
| Buying interest was mainly for primary issues, dealers said. There have been some primary issues that attracted investors seeking higher returns. |
| Power Finance Corporation issued 5-year bonds on September 13 at a coupon of 9.80 per cent, which is slated to close today compared with 9.73 per cent for 5-year bond in the secondary market. |
| Rural Electrification Corporation's 10-year bond issue at 9.85 per cent is also slated to close today. Both companies are said to have received a good response from investors. Exim Bank's three-year bonds issue at 9.10 per cent is currently open. |
| The National Bank for Agriculture and Rural Development's 9.50 per cent, 2010 paper with a call option at the end of one-year was the most dealt bond today at 9.41 per cent, the same level as last week. |
| Global market: Dollar ends weak |
| The trading in global markets saw a further weakening of the dollar. |
| GBP rose slightly against dollar by ruling around 1.9950 ( $ 2.0070) and Euro did not see much change at $ 1.3880. Yen strengthened against the currency at 114.85 against $115.30 last week. |
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