Markets Report

Money market

Sentiment: Cautious

Yields on gilts edged up by about two basis points despite easy liquidity.

The market feels RBI is not comfortable with the yields despite the benchmark 10-year gilt hitting a lifetime low of 5.7250 per cent a few days back.

The 7.27 per cent 2013 gilt opened at an yield of 5.736 per cent (Rs 111.72) and was last dealt at 5.75 per cent (Rs 111.63).

Call money closed at 4.75-5.00 per cent even as the RBI accepted 75 per cent of the bids (Rs 10,693 crore) at the one-day repo auction.

Forex market

Market Sentiment: Bullish

The rupee finished at a 26-month peak of 46.7925/8000 to a dollar against its previous close of 46.88/89. The six-month forward finished at 2.12 per cent against its previous close of 2.19 per cent.

Outlook:The rupee is expected to hover in the 46.75-46.82 band. Forward premiums may edge lower.