Sentiment: Weak
Medium and long-tenor gilts fell 50 paise and 75 paise respectively.
Trading was volatile.
Thursday's comments by a RBI official that "there is a bias towards discomfort" coupled with fear of an open market operation (OMO) auction dampened sentiment.
The OMO fears came true as RBI said it will sell the 10.95 percent 2011 bond for Rs 4,500 crore on Monday.
Yield of the 10-year gilt opened at 6.378 per cent (Rs 107.15), touched an intra-day high of 6.474 per cent (Rs 106.45), before finishing at 6.446 per cent (Rs 106.65).
Yield of the 5-year corporate bond rose to 6.512 per cent from the previous day's 6.4270 percent.
Call money closed steady at 5.00-5.25 per cent.
Outlook for tomorrow: Gilts will be cautious in wake of the OMO auction. Call rates will be easy.
Forex
Sentiment: Weak
The rupee ended at a three-and-a-half week closing low of 48.3050/3150 to a dollar against its previous 48.2550/2650.
Rupee-dollar trades see-sawed even as supplies were crimped as the New York market was closed on Thursday.
Opening at 48.2650/2750, demand from state-run banks saw the rupee touch an intra-day low of 48.32/33.
At the intra-day low, exporter supplies emerged and the rupee appreciated to 48.28/29, before demand for the greenback saw it weaken.
Forwards softened due to exporters selling their dollars forward.
Outlook for Monday: The movement of the rupee will be guided by dollar inflows coupled with intervention on behalf of RBI by state-run banks. If the banks buy, the rupee will rule weak, else it will appreciate.
