Gilts tank on rising inflation rate, Rupee plunges

MARKETS REPORT

Outlook
The rupee is likely to open between 46.08 and 46.12 per dollar on Friday.

Sentiment: Bearish

• The rupee opened at 46.09/11 per dollar and ended lower at 46.19 on dollar demand from foreign banks.
• Premiums on dollar forwards inched up. Annualised premiums on six-month and one-year dollar closed at 1.84 per cent and 1.62 per cent, respectively.

Money market

Sentiment: Bearish

• Government security prices tanked on increasing concerns over the headline inflation rate, which had gone past the 6 per cent mark last week.
• Prices of long-term government securities declined by Rs 1.20, while those of medium-term papers slid by 50-60 paise.
• The yield on the ten-year benchmark paper, 7.37 per cent 2014, closed at 5.96 per cent, compared with 5.88 per cent on Wednesday.
• Call money rates ended at 4.20-4.30 per cent.