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MARKET EYE WEEKAHEAD - Rupee seen stabilising

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Reuters
Last Updated : Jan 25 2013 | 5:33 AM IST

A relatively quiet week expected for Indian forex and debt markets in a holiday-shortened week.

No domestic events are scheduled ahead of the Reserve Bank of India's monetary policy review on October 30.

The rupee which hit a one-month low on Friday is seen stabilising, and is expected to hold in a 53.00 to 54.50 band next week, with exporters expected to step in to sell dollars.

The impact of earnings reports on domestic share markets will be watched. Euro moves and broader global risk sentiment should also provide cues.

The bond market is seen range-bound, with the benchmark 10-year debt expected to hold between the 8.10 to 8.20 percent band until the RBI review.

Despite some talk of potential bond buybacks via open market operations, after repo borrowings rose to a near four-month high of over 1 trillion rupees on Thursday, analysts see this as unlikely given the lack of debt auction for the week.

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Cash rates may edge up slightly due to the higher demand for cash from individuals and companies in the festival season.

Banks are also expected to over-cover their mandated reserve needs in the first week of the two-week reporting cycle.

KEY EVENTS: Monday: Monthly unused foreign investor debt limits auction

Wednesday: Markets holiday

Friday: Forex reserves data

Friday: Markets holiday

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First Published: Oct 20 2012 | 8:51 AM IST

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