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Saturday, Jul 09, 2005

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Rupee firms up; securities weak

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MUMBAI: The rupee marginally strengthened against the dollar as FII inflows neutralised the effect of the spiralling price of oil and a weak euro.

The rupee opened at 43.62/63 and touched an intra-day low of 43.64/6450. It closed at 43.61/62, up from Thursday's level of 43.64/65.

.In the forward premia market, the 12-month premium closed higher at 1.33 per cent (1.28 per cent) and the 6-month at 1.50 per cent (1.46 per cent).

The decline in the bond market continued due to higher oil price and rise in US yields, said dealers. The market sentiment was also bearish because of rumours that there could be another 25 basis points hike in reverse repo in the upcoming review of the monetary policy later this month. This is an indication that interest rates may go up. So, traders are squaring off their positions, said a dealer with a private bank.

The 7.38 per cent 10-year 2015 benchmark paper was dealt at levels of 7.19 per cent YTM (7.16 per cent YTM). The paper is not very active and the volumes were only Rs 15 crore.

The 7.27 per cent 8-year 2013 paper closed lower at Rs 101.08 (7.09 per cent) against the earlier level of Rs 101.13/17 (7.08 per cent YTM). The 7.37 per cent 9-year paper 2014 closed at Rs 101.31 (7.16 per cent), about 13 paise lower than the previous close, said dealers.

Liquidity in the call market was tight and the market closed at 6 per cent (5 per cent).

In the 3-day reverse repo auction, under the Liquidity Adjustment Facility, the RBI received and accepted 16 bids amounting to Rs 5,800 crore.

The CBLO market saw 271 trades being put through in the rate range of 2.25 per cent - 6.25 per cent, aggregating Rs 7,833.95 crore.

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