Re ends tad higher at 40.44/$

MARKETS REPORT

Forex market

Outlook:
The spot rupee is likely to open at above Rs 40.45.

Sentiment: Bullish

The rupee opened at 40.41 and closed around 40.42/44.

The annualised premium for the six-month and one-year forwards closed lower at 1.79 per cent (2.43 per cent) and 1.85 per cent (2.34 per cent), respectively.

Money market

Sentiment: Bullish

Call rates eased further on comfortable liquidity in the money market. It hovered between 0.75 and 3.00 per cent.

The Reserve Bank of India's intervention in the forex market to buy dollars for capping rupee appreciation has improved liquidity.

Total turnover in government securities was about Rs 14,200 crore with maximum volume in the 7.49% 2017 and 8.33% 2036 bonds, according to data available with negotiated trade system.

With the negative credit growth and low call rates, banks see government paper especially 10-year stock as most liquid and attractive avenue to park funds.

The 10-year government paper (8.07% 2017) closed at Rs 100.81. The yield on 10-year paper stood at 7.94 per cent.