Market Reports

Money market

Sentiment: Bullish

Yields on government securities eased to one-month lows on Thursday on the back of a surge in funds supply and growing expectations that the RBI will cut the key bank rate in end-April to spur growth, traders said.

Investors also drew comfort from renewed hopes that the US-led the war on Iraq will end soon, after which oil prices could drop. The benchmark 9.81 per cent 2013 gilt ended at 5.9722 per cent, nearly 10 basis points lower than its previous close of 6.0751 per cent.

The spread between the two- and 10-year bond narrowed to 36 basis points from 43 basis points at the start of the week, with investors pricing in a cut in the bank rate.

Forex market

Market Sentiment: Bullish on rupee

The rupee ended just below its 19-month high against the dollar at 47.4000/4050, off an early high of 47.375 on indirect RBI moves and dollar buying by oil firms. The 6-month premium crashed to a new low of 3.02%.

Outlook

The rupee should continue rising