Financial Daily from THE HINDU group of publications
Thursday, Jun 06, 2002

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Re firms up; gilts weak

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Mumbai: THE rupee closed stronger on Wednesday by around 4 paise at 49.01/49.0175 against the dollar in the forex market. The rupee opened at 49.04/05.

Forex dealers said, that market participants across the board were unwinding long dollar positions with nationalised and foreign banks selling dollars aggressively.

"War fears have eased and no one wants to stay long on dollars at the present time,'' said a forex dealer with a private sector bank.

Meanwhile, forwards eased with the six-month premium ending at 5.92 per cent (5.96 per cent) and the premium for one-year closing at 5.62 per cent (5.63 per cent).

Securities prices dipped by around 20-25 paise on the back of uncertainty in the market regarding the twin auctions to be held later on the day.

Dealers said that the bond market was predominantly characterised by thin volumes and most money market traders were awaiting the cut-offs in the auction for some indication as to where the markets are heading.

The 7.40 per cent 2010 paper, which had opened at around Rs 98.30, fell to Rs 98.02 and ended at around Rs 97.95/98.05. The 11.03 per cent 2012 paper ended at around Rs 122.40/50, after touching a high of Rs 122.55 during the day. The 7.55 per cent 2010 paper, which had opened at Rs 100.22, ended at Rs 100.05.

In the inter-bank call money market, the call rates closed at around Rs 6.10 per cent, after opening at 6.20 per cent. Dealers said that markets were still riding on the ample liquidity conditions prevailing in the market.

In the one-day repo auction, the RBI received four bids of Rs 12,725 crore and partially accepted the bid for Rs 9,544 crore at 6 per cent.

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