The Hindu Business Line : Rupee up 10 paise; securities plunge

"The forex market witnessed ample dollar supply from exporters, in addition to certain amount of FII inflows which boosted sentiment," said a dealer at a private sector bank.

The rupee opened strong at 45.95 and strengthened further to touch the day's high of 45.8850, before edging down. The weakening of the dollar against major currencies such as euro and sterling also influenced the rupee's gain.

The forwards opened lower but moved up later. The six-month forward ended at 2.14 per cent (2.04 per cent) while the twelve-month forward closed at 1.83 per cent (1.75 per cent).

Bonds fell with prices plunging about 80 paise. In medium term papers, it dropped by nearly a rupee.Although inflation number at 7.80 per cent was slightly lower than expectations; fears of the actual number being higher drove the prices down, dealers said. Actual inflation figure released on Friday for a previous period was up by 40 basis points higher at 7.91 per cent.

The provisional figure against this, released eight weeks back was 7.51 per cent. This upside dampened sentiment in an already thin market.

The ten-year benchmark 7.37 per cent 2014 paper fell by one rupee as its yield rose to 6.40 per cent before settling to close at 6.38 per cent. The closing price of the security was Rs 107.

The 11-year benchmark 7.38 per cent 2015 paper closed at an yield of 6.35 per cent at Rs 108.

Call rates closed at 4-4.20 per cent amid ample liquidity in the system. Under the LAF window, the RBI absorbed Rs 19,040 crore through 40 bids in the 3-day repo auction, while it mopped up Rs 505 crore by way of the 7-day repo.

The CBLO market clocked its record high daily transaction volume on Friday with 163 trades worth Rs 5,133.40 crore. The rate range was 1.00-4.65 per cent.