Sentiment: Cautious
Fears of open market operations (OMO) sales by the Reserve Bank of India kept trade in gilts in a 10 paise band.
Yield on the benchmark 7.40 per cent 2012 paper closed almost unchanged at the opening level of 7.09 per cent after touching an intra-day low of 7.08 per cent.
Yield on the 7.27 per cent 2013 paper, which was auctioned yesterday, closed two basis points lower from the opening level of 7.14 per cent. This paper was heavily bid as it is expected to be the 10-year benchmark next year.
Call money ended slightly higher at 5.70-5.75 per cent as against the previous close of 5.65-5.75 per cent.
Outflows on account of the Rs 7,000 crore twin-auction coupled with Rs 23,630 crore bids at the one-day repo auction strained liquidity.
Outlook: Prices of government securities will be rangebound as fears of OMO sales will still be there. Call money will be comfortable in the 5.70-5.75 per cent band.
Forex
Sentiment: Bullish
The rupee firmed up further to close at a new over eight months high of 48.3175/3200 per dollar.
There were ample supplies of the greenback but importer demand was negligible, resulting in the strengthening of the local currency.
The central bank was not seen intervening to curb the rupees rise.
Forward premiums stayed around the four per cent level on the back of widely expected repo rate cut and no paying interest by banks.
Outlook: The rupee could open weaker on account of the weekend swap differential. However, good greenback supplies will push it higher. It could trade around 48.30-48.33 per dollar. Forward premiums will hover around the four per cent mark.
