Money

Sentiment : Positive

Liquidity keeps call money rates grooved in the 5.60 per cent-5.85 per cent band.

There were 16 bids of Rs 14,090 crore at the repo auction all of which were accepted fully.

Gilts rose by 25-35 paise driven by liquidity. Dealing was concentrated in the medium and longer ends of the maturity scale.

Gilts got a boost as the Reserve Bank of India refrained from announcing any open market operation.

The cut-off yield at Tuesday's auction was below the expected levels, which gave the impression that the yields may fall afresh on Wednesday.

Yields on corporate bonds declined in tandem with gilt yields.

Outlook: Government security prices are likely to move up if the Reserve Bank of India does not announce another open market operation. Call money rates will be in a range of 5.60 per cent to 5.80 per cent.

Forex

Sentiment : Positive

The rupee strengthened by six paise to close at 48.6600/6650 due to lack of demand and heavy supplies.

The supplies were mainly from exporters.

State-owned banks were buying greenbacks, while the foreign banks were main sellers.

The Reserve Bank of India (RBI) was not present in the market.

Forward premiums dipped marginally as the government paper yields moved southward.

The expectation of a rate cut by the US Federal Reserve stemmed the fall in the premium rates.

Volume in the forward premium market, however, remained very low.

Outlook: The rupee is likely to remain between 48.65 to 48.70 amid good dollar supplies from exporters, but intervention by the RBI. Premiums, however, are likely to remain in a thin band around the current levels.