Money

Sentiment : Bullish

Medium-tenor gilts ended 15 paise higher, while short and long issues edged up three to five paise.

The cash glut and the comment of a senior Reserve Bank of India official on bank rate cut drove gilt prices up.

Abundance of the 7.40 per cent 2012 paper is restraining the prices of other gilts.

Funds continue to keep call rates easy in the 5.65-5.75 per cent band.

There were 13 bids for Rs 18,235 crore in the one-day repo auction, all of which were accepted for Rs 16,412 crore at 5.75 per cent.

Outlook: Gilt prices should open higher and selling could come in after prices appreciate by 10 paise. Call money will hover around the repo rate of 5.75 per cent.

Forex

Sentiment : Bullish on rupee

The rupee ended at 48.4650/4700 per dollar compared with Monday's 48.4750.

Corporates and exporters sold dollars at 48.4650-48.4725 levels, and state-owned banks kept picking these up.

A senior Reserve Bank of India (RBI) official's comment that there would be a 50 basis point cut in the bank rate led to far forwards falling by 13 basis points.

Players feel the RBI will not allow the rupee to move more than 2-3 paise on either side of spot.

Outlook: The rupee is expected to maintain its appreciating trend and trade in the 48.45-48.49 band per dollar. Forward premiums could come down a touch.