Call Money & Gilts

Sentiment : Cautious

* Call rates remained flat in a 5.60 per cent to 5.75 per cent range due to the liquidity overhang in the system.

* Response to the repo auction was good. The RBI partially accepted 22 bids for Rs 25,067 crore, out of a total Rs 27,850 crore.

* In the government security (G-sec) market, prices were range-bound as the market participants adopted a cautious approach.

* Banks and primary dealers were not interested in booking positions as there was suspicion that the central bank may come out with an open market operations (OMO) auction.

* The expectation of the OMO auction was realised at the end of the day as the central bank announced a twin OMO auction of Rs 3,500 crore.

* The sentiment of the market in the dying hours of the day, however, looked up as the amount of the auction was too small.

* Corporate bond market tracked the G-sec market, and the yields of the corporate debt paper remained range-bound.

Outlook: Call money rates are likely to remain in a range of the 5.60 per cent to 5.85 per cent. The G-sec market is likely to open on a bullish note. However, there can be profit-booking at higher levels.

Forex Report

Sentiment : Positive

Spot rupee closed at a 19 week high of 48.6950/6975 per dollar today due to abundant supplies of greenbacks from the exporters.

The exporters were seen to cover their future receivables in addition to bringing back the current proceeds.

State-owned banks, which were inactive in the early session, started mopping up dollars as the rupee touched 48.68. This is seen as indirect intervention by the RBI.

Private and foreign banks were seller of greenbacks throughout the day.

Forward premiums little changed as gilt yields remained rangebound.

Outlook: The rupee is likely to remain strong against the greenback, but indirect dollar buying by the RBI may stem its rise. Forward premiums are likely to spin lower again due to the easy liquidity condition.