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Thursday, Feb 28, 2002

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Rupee weak; gilts choppy

Our Bureau

MUMBAI: THE rupee closed weaker on Wednesday by around two paise at 48.7350/7450 against the dollar in the forex market, as compared to the previous close of 48.7250.

After opening the day at 48.7150/7250, the rupee hit a low of 48.79 on account of State-run banks mopping up dollar supplies. However, some dollar selling in the latter part of the day nudged the rupee to its closing levels, according to forex dealers.

Forwards were relatively flat with the six-month premium ending at 5.60 (5.54 per cent) and the premium for one-year ending at 5.15 per cent (5.19 per cent).

Securities market was choppy with prices actively traded papers fluctuating in a band of Rs 1 to Rs 1.50 before closing lower than the opening levels.

Opening strong, prices fell by around 70-80 paise in the morning as news of the attack on the Sabarmati Express filtered into the markets. Prices, however, rallied later by around 30-40 paise. Bond prices closed lower by 30 paise from opening levels.

The 11.50 per cent 2011 paper, which had opened at around Rs 129.55 fell to around Rs 128.70 and closed at Rs 129.10/15. The 11.40 per cent 2008 paper closed at around Rs 123.05/15 after touching a low of Rs 122.70 in the morning. This paper had opened at around Rs 123.50.

The 11.03 per cent 2012 paper closed at around Rs 126.80 (YTM--7.30 per cent) after opening at Rs 127.35/40 and the 9.85 per cent 2015 paper opened at around Rs 121.92 and touched a low of Rs 120.65. The paper ended at around Rs 121.45/48.

Dealers said that sentiment had weakened in the morning on news of the attack but during the afternoon trade, prices stabilised and then started rallying.

Said one dealer, "There was some sporadic profit-booking and then some sporadic buying. Initially, there were some doubts that Wednesday's attack on Sabarmati Express may disrupt the Budget proceedings. But after a while, markets settled down on renewed hopes of a savings rate cut on Thursday.''

The volatile trade in the Government securities markets was reflected in the call rates, which touched a high of seven per cent.

Dealers said that State Bank of India, one of the biggest lenders, started the day by quoting at around seven per cent.

Call rates later fell to close at around 6.50-6.60 per cent.

In the one-day repo auction, the RBI received and accepted four bids of Rs 670 crore at 6.50 per cent.

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