Inflation spoils bond party

Government bond prices ended Rs 1.30 down today because fear of a sharp rise in weekly inflation rate prompted investors to sell, dealers said. Price of the 10-year benchmark 8.24 per cent, 2018 paper ended at Rs 99.00 or 8.3919 per cent yield to maturity, compared with Rs 100.30 or 8.1923 per cent yield on Wednesday.

After market hours, the government detailed inflation rate for the week to September 6, which rose to 12.14 per cent against market estimate of a fall to 11.95 per cent.

Rupee: Off lows

Rupee recouped most of its losses today because most banks sold the greenback noting its weakness against major currencies and also on strong dollar supply from state-run banks, dealers said.

The Indian unit ended at Rs 46.4700 per $1 amid volatility, compared with Rs 46.3200 per $1 on Wednesday. Intra-day, it had slipped to low of Rs 46.7900 per $1. Most banks liquidated long-dollar positions noting the greenback’s fall against the euro and the pound sterling towards the close of trade.