Sentiment : Cautious
Prices of gilts moved in a narrow five paise band today.
Inflation, which rose to a 38-week high of 3.77 per cent, along with a pick-up in credit and quarter-end profit booking weighed gilts down.
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The Union labour minister's comments that the state-run pension fund will continue to offer an interest rate of 9.50 per cent further dampened sentiment.
Yield on the benchmark 7.40 per cent 2012 paper stayed almost unchanged at 7.17 per cent.
Players preferred running their current positions to making fresh investments.
Call money ruled easy around the repo rate of 5.75 per cent.
There were six bids for the one-day repo for Rs 8,775 crore, all of which were fully accepted.
At the 14-day repo auction, there were 4 bids for Rs 14,195 crore, which were accepted for half the amount.
Outlook: Government securities will stay rangebound. Call money will be comfortable in the 5.70-5.80 per cent band.
Forex
Sentiment : Bullish on rupee
The rupee ended stronger at 48.3975/4025 per dollar against Friday's close of 48.41/42.
Supply of greenbacks was good on account of exporter sales, while importer demand was thin.
State-owned banks bought dollars at 48.41-48.42 to keep the rupee from rising beyond the 48.40 mark.
However, towards the fag end of trading, these banks withdrew from the market, which led to the rupee rising above 48.40.
Premiums on the forward dollar edged up due to rollover of payables ahead of the half-year ending on September 30.
Outlook: The rupee is expected to hover in the 48.39-48.41 band per dollar amid unloading of greenbacks by exporters. Traders will have an eye on crude oil prices, which is nosing up on account of US-Iraq tensions. Premiums will be range bound.