Markets Report

Money market

Sentiment: Moderate

The cap on NRE deposits led to heavy selling of gilts by private banks. Nationalised banks bought gilts thinking that the restriction signals lowering of interest rates.

The heavily traded 6.35 per cent 2020 and 8.07 per cent 2017 securities fell by 10-15 paise.

The 10-year, benchmark 9.81 per cent 2013 gilt closed at 5.72 per cent.

Call rates hovered around 4.9-5 per cent with repo subscriptions at around Rs 26,000 crore.

Forex market

Market Sentiment: Bearish

Cap on NRE deposits pushed the rupee down 10 paise to its intra-day low of 46.30 after it opened at 46.20. However, it closed at 46.23 as exporters sold dollars.

The 6-month forward premium closed at 2.35 per cent.

Outlook

The rupee is expected to open at 46.2350/2450 against the US dollar on Friday.