Paring the gains from the morning session of trades, the Indian rupee ended flat from Friday’s close at 60.11 against the US currency amid capital flows and weaker domestic and Asian equity markets.

The domestic unit opened stronger at 59.91 as against previous close of 60.10 against the dollar due to a higher opening in the equity markets and dollar selling by banks and exporters.

During the day, the unit strengthened to 59.79 during the morning trade on stronger inflows combined with dollar selling and a weaker euro. However, weaker global and Asian markets amid capital outflows from the equity markets weakened the Indian currency to 60.24 against the greenback in the late afternoon trading session.

BSE-benchmark Sensex recovered from a drop of over 100 points to end at 22,343 points, weaker by a meagre 16 points over the previous close.

Japanese Nikkei fell to a one-week low, while world stocks slipped from last week’s six-year high on global indices.

In addition, the Euro was under pressure from expectations that the European Central Bank may undertake a programme of asset purchases this year to support the economy, thereby easing policy and pushing down its bond yields.

Call rates up; Bonds flat

Amid high liquidity, the overnight call money rate, interest rate at which banks borrow money from each other to overcome short-term liquidity mismatches, ended sharply higher at 9.10 per cent from Friday’s close of 7.10 per cent.

The yield on 10-year benchmark 8.83 per cent government bond, maturing in 2023, hardened to 9.10 per cent from its previous close of 9.06 per cent. The prices of the security ended weaker at Rs 98.27 from Rs 98.49. Bond prices and yields move in the opposite direction.

(This article was published on April 7, 2014)
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