Money

Sentiment : Bullish

Gilts of 7 to 11 year maturities perked up by around 20 paise today.

The trigger for the gilts was the conversion yesterday of ad hoc treasury bills worth Rs 7,000 crore into 2005 and 2013 papers at market-related yields, apart from the surfeit of funds.

The benchmark 7.40 per cent 2012 paper ended higher by 20 paise at Rs 101.82 (Yield : 7.13 per cent).

The cut-off price at its fortnightly auction of 364-day bills was raised to Rs 94.46 (Yield: 5.88 per cent) from Rs 94.37 (Yield: 5.98 per cent) at the previous auction.

The central bank also set a higher cut-off of Rs 98.60 (Yield: 5.6951 per cent) on the 91-day bill from Rs 98.58 (Yield: 5.7776 per cent).

Call money hovered around the repo rate of 5.75 per cent.

Demand for overnight funds was moderate.

Outlook: 7-11 year gilts are expected to edge higher by 15-20 paise as the Reserve Bank of India set a higher cut-off on the treasury bills auctioned yesterday. Call money will be comfortable at around 5.75 per cent.

Forex

Sentiment : Bullish on rupee

The rupee keeps up its strong showing, ending at 48.4475/4500 per dollar compared with Tuesday's close of 48.4650/4700.

Importer demand for dollars was slender while inflows were ample.

The market is currently oversold on the dollar

With US taking a strong stand against Iraq, importers, especially oil companies, could take cover.

Forward premiums had a steady day.

Outlook: The rupee is set to strengthen afresh on the back of continuing dollar inflows. It is expected in the 48.42-48.45 per dollar range. Forwards premiums could wind down a shade.