Sentiment: Bullish
Driven by easy liquidity, prices of long-dated government securities rose by 20-25 paise.
The 8.35 per cent 2022, which is scheduled to be auctioned tomorrow, opened at a yield of 6.95 per cent (Rs 114.80) and was last dealt at 6.93 per cent (Rs 115).
The benchmark 7.40 per cent 2012 gilt opened at a yield of 6.37 per cent (Rs 107.20), eased to 6.356 per cent (Rs 107.30), and was last dealt at 6.363 per cent (Rs 107.25).
Yields of corporate bonds eased by 5-6 basis points.
The five-year benchmark bond fell to 6.410 per cent, from Tuesday's dealt levels of 6.475 per cent.
With the RBI accepting all the 36 bids aggregating Rs 16,875 crore and PDs taking aggressive positions in long-dated papers, call money ended at 5.50-5.60 per cent (5.40-5.50 per cent).
Outlook: The gilts market is expected to open higher as the RBI has set a low cut-off rate of 0.75 paise for underwriting bids by PDs for the auction of the 8.35 per cent 2022 paper. The market expects a cut-off between Rs 115.20-Rs 115.30 on the paper. Call money should hover around the repo level.
Forex
Sentiment: bullish
The rupee finished firm at 48.20/21 as against the previous close of 48.2550/2600. It opened at 48.23/24, touch an high of 48.25 and a low of 48.1950 in intra-day trades.
Forward premiums up to six months rose marginally, while far forwards eased.
Outlook: The rupee is expected to trade firm in the 48.18-48.23 band. State-run banks could curb any drastic appreciation in the rupee.
