Bond prices rallied, responding favourably to the inflation figure of 5.87 per cent for the week ended June 19. | |
| The yield on the benchmark 10-year paper (7.37 per cent 2014) fell eight basis points to close at 5.78 per cent today, against yesterday's close of 5.86 per cent. But the rupee was range bound, closing at 45.87 against the dollar. |
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| The market had expected the wholesale price index-based inflation rate to cross 6 per cent in the week. |
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| As bond prices rallied in immediate reaction to the inflation data, market players desperately looked for decent levels to exit booked profits. |
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| The initial surge, thus, could not be sustained at higher levels. With selling pressure emerging, bond prices in the long-end fell 30-40 paise. |
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| In the foreign exchange market, the spot rupee remained within a range of 8-10 paise and closed at 45.87/88 to the dollar. Lower inflation numbers and interbank receiving swaps pushed down the forward premia. Six months and one year forward dollar premiums closed at 1.64 per cent and 1.5 per cent, respectively, against 1.80 per cent and 1.58 per cent on Thursday. |
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