The Hindu Business Line : Rupee stronger; securities decline

"The NTPC issue is expected to bring in substantial dollar inflows from FIIs, which has helped improve sentiment," said a dealer at a private sector bank.

Traders said with stock market posting gains and FII dollar inflows in the recent days, the rupee is strengthening. Although concerns on oil front persist , underlying sentiment is in favour of the rupee. Recently oil-related buying has not been witnessed as month-end demand has also eased.

The forwards inched up as the six-month forward closed at 2.17 per cent (2.14 per cent) while the 12-month forward ended at 1.88 per cent (1.83 per cent).

Bond prices remained on shaky ground as further fall was witnessed in prices. The announcement from the Government that borrowing programme would be on schedule for the first half of the month dampened sentiment, traders said.

Prices fell on worries of pressure on liquidity as no major expenditures are lined up for the month, while the auction would drain cash from the system, they added. Yield on the benchmark 10-year paper 7.37 per cent 2014 paper rose as high as 6.50 per cent during the day before it recovered to end at 6.45 per cent, 7 basis points higher than previous close. The 11-year 7.38 per cent 2015 paper closed at a yield of 6.39 per cent before it had shot up to 6.45 per cent.

Call rates tightened as they were in a range of 4.55-4.65 per cent. Under the LAF window, RBI mopped up Rs 1,525 crore by three bids in the 14-day repo, Rs 2,350 crore through eight bids in the 7-day repo, while it absorbed Rs 12,865 crore through 31 bids in the 1-day repo.

In the CBLO market, 150 trades worth Rs 4,561.0 crore were transacted in the range of 4.50-4.65 per cent.