The Hindu Business Line : Rupee breaches 46; gilts down

The market was under buying pressure due to heavy month-end demand from oil companies. The supply side of the market has fairly dried up and the greenback kept rising for most of the trading day. The forwards market moved higher due to cancellation by a few banks, said dealers. The six-month annualised forward premia closed at 1.62 per cent (1.56 per cent) and the twelve-month forward closed at 1.45 per cent (1.29 per cent).

Bond prices opened on a weak note but rose during trading hours before closing lower than opening levels.

The 8.07 per cent 2017 paper closed at Rs 116.25 before it had rose to Rs 116.70/75 during the day. The 7.38 per cent 2015 paper touched a high of Rs 111.85/90 before closing lower at Rs 111.20/30. The ten-year bench mark 7.37 per cent closed at Rs 111.20, about 10 paise lower than opening levels.

Volumes were thin in the late trading hours when market weakened on auction announcements of treasury bills and market stabilisation bonds schedule, said dealers.

Market apprehensions of a Fed rate hike of 200 basis points in the coming year also drove the market down, dealers said.

The market is waiting for the Federal Open Market Committee (FOMC) meeting due on June 30, said dealers. The market has already factored in the expected hike of 25 basis points by the Federal Reserve and the statement accompanying the hike is eagerly awaited. Call rates were at 4.25 - 4.35 per cent in the inter-bank market.

Under the LAF of the RBI 45 bids worth Rs 20,350 crore were received and accepted