No hiccups seen

GOVERMENT SECURITIES

It's just the week for government bonds. No auctions, no major outflows except for advance tax outflows. "Sentimentwise, there are deterrents," said a dealer. The benchmark paper 7.38 per cent 2014 is expected to rule in the range of 6.55-6.68 per cent.

While the downside is capped if the market prefers to factor the effect of the Opec oil output cut, the upside is limited as there will be buying demand and liquidity. Banks, which were waiting to offload purchases made last week, are likely to sell in the first half of the week.

Recap: Backed by liquidity, the yield on the benchmark paper fell from highs of 7.25 per cent to a low of 6.60 per cent. The market got perked by the finance minister's assurance that the worst on inflation is over even as the Opec decided to cut supply.