Sentiment: Cautious
Prices of government securities edged up by five paise towards close of trade as fears of the Reserve Bank of India (RBI) pressing open market operation (OMO) sales subsided for now.
The benchmark 7.40 per cent 2012 paper opened at a yield of 7.087 per cent, edged up to 7.091 per cent and closed at 7.084 per cent.
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Some banks faced liquidity mismatches and stray call money deals were done at 5.80 per cent as all the 9 bids made at the repo auction were fully accepted, draining our Rs 18,980 crore from the system.
Overnight rates ended flat at 5.65-5.75 per cent, down from the days high of 5.80 percent.
Outlook: Gilts prices will be range bound, while the inter-bank overnight call money will be comfortable around the repo rate.
Forex
Sentiment: Positive
The rupee eased to 48.36 per dollar as banks covered their short dollar positions to gain from the weekend spot differential.
It had edged higher to 48.33 on account of supplies, after opening at 48.3350/3400.
For deals done today spot settlement date is Wednesday as New York is closed on Monday and Indian markets are closed on Tuesday.
Premiums on the forward dollar were led lower by ample liquidity in the call money market.
Outlook: The rupee is likely to be ranged in the 48.34-48.36 band to a dollar. Premiums on the forward dollar will track the trend in the spot arena.