Market Reports

Money market

Sentiment: Nervous

Yields on gilts and corporate bonds jumped by about 10 bps and 30 bps, respectively.

Volume in the gilt market was low at Rs 1600 crore, while it was a measly Rs 20 crore in the corporate bond market

Fear of an imminent US strike on Iraq led to sell-offs in the market; but a statement by an RBI official that the central bank will intervene to curb volatility led to some buying.

Call money rates closed a tad higher at 5.50-5.75 per cent.

The 7.40 per cent 2012 gilt closed at Rs 106.75 (6.41 per cent).

The benchmark 9.81 per cent 2013 gilt was last dealt at Rs 124.80 (6.45 per cent).

Forex market

Market Sentiment: Edgy

The rupee ended a tad weaker at 47.6675/6750 per dollar as banks bought dollars expecting the rupee to depreciate in the event of a war. The six-months forward premiums ended up at 3.68 per cent (3.58 per cent) on importer covering.

Outlook: Trading in the forex market on Wednesday will be dictated by the action/ stand taken by the US against Iraq. The market is closed today on account of Holi.