Financial Daily from THE HINDU group of publications
Tuesday, Jul 30, 2002

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Re down 7 paise; securities weak

Our Bureau

Mumbai: THE rupee lost seven paise against the dollar to close on Monday at 48.75/76, as against last Friday's close of 48.68.

Forex dealers ascribed the weakening of the rupee short covering by dealers leading to a good amount of demand for the greenbacks.

"During the initial part of the day there was good amount of corporate demand, following this other market players might have panicked to some extent and wanted to cover their short-dollar positions,'' said a forex dealer with a private sector bank.

Meanwhile, some dealers ascribed the jittery market mood to the international currency major's recent rally being stemmed by the `correction phase'.

The forward market was relatively stable even as the premium for the six- month and one-year ended slightly higher at 4.55 per cent (4.43 per cent) and 4.58 per cent (4.52 per cent) respectively.

Bond prices dipped by around 25-30 paise from opening levels as profit-booking and some negative sentiment brought prices down.

The 10.25 per cent 2021 paper, which had opened at around Rs 122.50, closed at around Rs 122 and the 9.81 per cent 2013 paper, which had opened at Rs 117.90, closed at Rs 117.60. The 10.71 per cent 2016 paper closed at around Rs 125.40 as against opening levels of Rs 125.80.

Dealers said that after the rally in longer-end paper by around 50 paise-Re1 on Saturday, there was some profit-booking in these papers on Monday.

Said one dealer in a nationalised bank, "The expected auction in the first week of August as well as worries over the lack of rainfall have spurred some selling pressure. Traders fear that there may be a further rise in inflation on account of the poor monsoons.'' He added that the underlying sentiment, however, was still positive.

Call rates continued to rule steady at around 5.65-5.75 per cent. In the one-day repo auction, the RBI accepted bids of Rs 14,052 crore after receiving bids of Rs 17,565 crore at 5.75 per cent and in the 14-day repo auction, the central bank accepted bids of Rs 9,232 crore after receiving bids worth Rs 11,540 crore at 5.75 per cent.

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