The rupee gained by close of trades with worries of a war receding. Opening the day at 49.02/0250 from its overnight close at 49.04/0450, the rupee gained by close of trades to 48.99/9950. Trades were moderate, and cautious. “A slight easing of Indo-Pak border tensions induced banks to unwind their long dollar positions,” dealers said. The market was largely quiet and there was no panic with concerns of war easing. The rupee is expected to quote in a tight range of 48.98-49.03 level in the days ahead with increased import demand below the 49-mark and better export supply above that level. The Reserve Bank of India fixed its reference rate for the dollar at 49.01 (49.03). “Monday will be the day to watch... the first half an hour of trades will determine the trend. But I think, it will be rangebound with little volatility,” a dealer with a US-based bank said.
FORECAST: Rupee seen at 49.97-49.03 levels on Monday.
Forward premiums eased on Friday on the bank of improved sentiments. The six-month annualised forward cover quoted softer at 6.34% from its overnight quote at 6.78%. “Opening on a bullish note, the rupee remained stable amid steady export dollar supply and matching import dollar demand,” a dealer said. The spot-rupee after opening at 49.02/0250 from its overnight close at 49.04/0450 gained by close of trades to 48.99/9950. Softer call rates also aided the dip in premiums across-the-board. Opening the day at 7-7.25%, call rates eased to 6.40-6.60% by close of trades on reduced demand for funds. In the near terms, June dollars quoted at 25/26 paise, July at 54/55 paise while in the far forwards, October closed at 135/136 paise with November at 156/157 paise. The 10-year yield curve also softened on the back of improved sentiment and came off to 7.75% from 7.90% thereabouts.
ORECAST: Premiums seen quoting softer on Monday.
Government securities gained by over Re one on Friday with buoyancy coming into the markets on the back of receding war tensions. “G-Secs extended gains by an average of Rs 1.50 in intra-day trades with good buying interest,” a dealer said. Prices of most bonds approached prior Kashmir attack levels. “Over Rs 3,000 crore by way of inflows through coupon payment aided sentiment,” dealers said. Good liquidity was also evidenced in the fact that RBI continued to reject major parts of the repos amount it received while accepting only a quarter of the amount. The RBI accepted Rs 1,500 crore at its three-day repos at 6% out of Rs 6,000 crore it received. The 11.50% 2011 was up by Rs 1.70 to Rs 126.10 from its overnight close at Rs 124.40. The 11.03% 2012 rose by Rs 1.60 to Rs 123.10 (Rs 121.50) while the 9.85% 2015 shot up by Rs 2.70 to Rs 115.20 (Rs 112.50).
FORECAST: Gilt prices may rally again on Saturday.
— Compiled by Raghu Mohan