Sentiment: Cautious
Gilts moved in a tight three paise band as fears about the Reserve Bank of India (RBI) conducting an open market operation sale of securities overshadowed activity.
The RBI was expected to sell gilts to cool down the rally in prices sparked off by the surfeit of liquidity in the banking system and expectations of an interest rate cut.
Yield on the benchmark 7.40 per cent 2012 paper remained almost unchanged at 7.08 per cent.
Call money ended higher at 5.80-5.90 per cent as against the previous close 5.70-5.75 per cent.
With lenders wrapping up most of their deals early and parking their surplus in 3-day repo, the late demand led to execution of call money deals at even 6.10 per cent.
Outlook: Prices of gilts will be ranged as most of the players will stay on the sidelines on account of the weekend. There will not be much demand for call money.
Forex
Sentiment: Bullish
The rupee closed firm at 48.3400/3425 per dollar due to inflows from foreign institutional investors.
It stayed in a narrow 48.3300-48.3325 band for most part of Friday. But this level could not be sustained following demand for the greenback from a steel company.
Premiums on the forward dollar edged lower as the market priced in the 0.25 per cent rep rate cut.
Outlook: The rupee is expected to slightly strengthen as the New York market is closed on Monday and there will be no cash payments. Forward premiums will hover in the 3.90-4.10 per cent band.
