Overnight rates finished a shade higher at 9.10-9.25 per cent on Wednesday. Opening the day at 8.90-9 per cent from its previous close at 8.50-8.70 per cent, call rates moved up to an intra-day high of 9.25 per cent. "Trades were active today. Banks were seen covering ahead of Thursday's holiday. Sentiment was also affected by the Rs 2,500 crore outflow from Wednesday's auction of the 12.32 per cent 2011", a dealer with a European bank said. The outflow was, however, off-set by the Rs 2,600 crore inflow on account of the maturing 1999 floating rate bond (FRB). Most of the trades were struck at around 8.90-9.05 per cent levels. Elsewhere, the National Stock Exchange fixed its overnight Mibid and Mibor at 8.83 per cent (8.78 per cent) and 9.01 per cent (8.98 per cent) with the fortnightly one unchanged at 9.13 per cent (9.13 per cent) and 9.70 per cent (9.72 per cent).

FORECAST: Call rates seen ruling at 8.90-9.10 per cent levels on Friday.

SPOT DOLLAR

The rupee weakenedto an intra-day low of 43.61 on Wednesday, its lowest in 13 months after fell to 43.70 in August '98 after the imposition of economic sanctions following its Pokharan nuclear tests. Opening the day at 43.5850/5950 from its overnight close at 43.5675/5725, the rupee started going lower on fairly active corporate interest for dollars. "The holiday on Thurday for bank's half-yearly accounts affected trades. There appeared to be a slight bunching together of month-end dollar-demand with the spot-date shifting to October 1", a dealer with a Gulf-based bank said. By early noon, the rupee had slipped to its intra-day low of 43.60/61. At close, the rupee was seen at 43.59/60 on the back of dollar-sales by State Bank, and other public-sector banks. Cash/tom was quoted 1.25/1.50 paise (0.25/0.50 paise), cash/spot at 2.50/3 paise (1.50/2.25 paise) with tom/spot at 1.25/1.50 paise (1.25/1.75 paise). The Reserve Bank pegged its reference rate for the dollar at 43.61 as against its previous 43.57. The rupee opened at 45.72(45.52) against the Euro, went to an intra-day high of 46.02 (45.70) to finally close at 45.92 (45.65).

FORECAST: Rupee seen at 43.5950/60 levels on Friday.

FORWARD PREMIUMS

Forward premiums moved up in intra-day trades by 2 to 3 paise on Wednesday, but closed almost unchanged from their overnight levels. The six-month annualised forward premiums closed unchanged at 5.64 per cent (5.42 per cent). "The upward movement in premiums was in line with a weaker spot rupee at 43.60/61 levels. There was corporate demand for dollars. The month-end demand was a bit compouned by the holiday on Thursday", a dealer with a European bank said. In the near term, October finished at 16/17 paise (15/17 paise) with November unchanged at 36/37 paise. In the far forwards, April held firm at 139 /141 paise and May at 163/164 paise (158/162 paise). Dealers cited exit polls that showed the BJP will win 249 of the 418 seats polled so far to drive home the point that there will be any untoward influence on premiumsin the short-run. "There is slight amount of residual month-end dollar interest from importers, but overall volumes are thin. Paying interest will abate once the month-end demand gets over", a dealer with a US-based bank said.

FORECAST: Six-month annualised forward cover seen at 5.40 per cent levels on Friday.

GILTS

Trading in the government securities continued to be dull on Wednesday with prices moving in a narrow range. The 11.19 per cent 2005 was quoted at Rs 100.62 levels and 11.98 per cent 2004 at Rs 103.83. "Outflows of Rs 2,500 crore from Tuesday's auction of the 12.32 per cent 2011 has not affected trades. It was off-set by inflows of Rs 3,500 crore are due on account of a maturimg floating rate bond", a dealer with a primary delearship said. The 11.50 per cent 2004 was seen at Rs 101.95 levels. "It is just two weeks more, and we will know who is going to form a new government at the Centre. Players are not taking any positions. There is also talk that the Reserve Bank will easemoney market conditions after a new government comes to power", a dealer with a US-based bank said.

FORECAST: Gilts prices seen at current levels on Friday.

Compiled by Raghu Mohan