The Hindu Business Line : Bonds pare losses; rupee tad weaker

The 7.37 per cent 2014 paper opened at Rs 110.80 and fell to Rs 110.65 (5.90 per cent YTM). The 7.40 per cent 2012 opened at Rs 108.75/80 and fell to Rs 108.45/50.

However, once the auctions were announced, the market perceived the `floating rate' paper as a positive, and there was a mild rally in some securities towards closing, dealers said.

"The auctions are on schedule, so it is not a big surprise. Only the composition of the securities have been modified to suit current market conditions," said a dealer.

Call rates ruled at 4.50 per cent levels in the inter-bank market. In the 7-day repo under LAF, RBI received and accepted 18 bids amounting to Rs 7,235 crore and 43 bids amounting to Rs 26,265 crore at the rate of 4.50 per cent.

The rupee closed at 46.34/35 per dollar on Monday, around five paise weaker as compared to its previous close on Friday at 46.29/30.

Although a bout of exporter selling took the rupee to a high of 46.31, a bout of genuine corporate demand from oil majors, drove the currency down against the greenback during closing, dealers said.

Forwards inched up slightly with the premia for six and twelve months ending at 1.99 per cent and 1.73 per cent respectively, as against 1.95 per cent and 1.70 per cent respectively last Friday.