Re ends firm at 42.92/$

MARKETS REPORT

Outlook:
The dollar is likely to show tendency towards appreciation.

Sentiment:Cautious

The spot rupee traded at Rs 42.90/91 in early hours, but later appreciated to the 42.74 level. It closed at Rs 42.90/92.

The annualised premium for the six-month and one-year forwards closed at 5.27 per cent and 4.11 per cent, respectively.

Money Market

Sentiment: Cautious

Liquidity remained comfortable on Monday.

Some banks bought bonds to use them as collateral to borrow funds from the Reserve Bank of India.

The yield for the 10-year government paper (8.07 per cent 2017 bond) at the close was 8.12 per cent.

Call rates eased and remained in the 5.5-7 per cent range. The Reserve Bank of India absorbed over Rs 2,200 crore on net basis through liquidity adjustment facility.

The present liquidity is seen enough to match the demand from banks and yields on bonds are looking attractive to build positions before money gets tight again