Sentiment : Cautious
Gilts moved in a six to eight paise band. They came under selling pressure early in the session. This was followed by some value buying and once again, towards close, came under selling strain.
Volumes were low around Rs 2,000 crore on concerns about the cut-offs at the twin auction and rising inflation.
Call money rates closed a trace firmer at 5.65-5.75 per cent.
Outlook for Wednesday: Market-related cut-offs at the twin auction could lift gilt prices by 10-15 paise. Else they will be range-bound. Call money will be comfortable in the 5.65-5.75 per cent band.
Forex
Sentiment : Bullish on rupee
The rupee ended strong at 48.4950/5000 per dollar compared with Friday's close of 48.5900/5950 following unwinding of long dollar positions built up by banks over the weekend.
Supplies of greenbacks from corporates and remittances from non-residents also helped up the rupee.
Demand for dollars from importers was light, but paying interest from them lifted forward premiums.
With crude touching $30 a barrel and uncertainty over US action against Iraq continuing, importers resorted to forward covering.
Outlook for the rupee: Bunched-up supplies (the market is closed on Tuesday) will see the rupee hovering in the 48.47-48.51 band per dollar on Wednesday. Forward premiums will come off a bit.
