Rupee falls 51 paise to 48.96 against dollar
The dollar index - a gauge of the dollar’s movement against six major currencies - was, however, up 0.6% by late evening.
By ET Bureau |
MUMBAI: The rupee fell 51 paise to close at 48.96 against the dollar, as dealers turned risk averse with stock markets tumbling on the first day of the week. The downswing in stocks soured sentiment as global traders made a beeline for safe haven currencies like the dollar and the yen. The dollar index ��� a gauge of the dollar���s movement against six major currencies ��� was, however, up 0.6% by late evening.
Government bond prices continue to be under pressure, with traders predicting that the government would struggle to successfully execute auctions in the coming days. The 10-year benchmark bond yield ended largely unchanged at 7.08%, the market is preparing itself for another Rs 12,000-crore auction this week.
Late in the evening, the government announced its plans to raise Rs 12,000 through sale of three bonds including the 10-year benchmark security.
���The mood doesn���t look good for bonds, with traders getting tired of the Rs 12,000-crore auctions hitting the market week after week,��� said Anoop Verma, associate vice-president with Development Credit Bank. ���Although yields are attractive to build fresh positions, everybody���s afraid of having to incur further losses,��� he added.
The government raised Rs 12,000 crore through the sale of bonds last Friday, but at yields much higher than expected. Primary dealers underwriting this issue had to subscribe to over Rs 900 crore of newly-issued bonds, as the issue was undersubscribed at the cut-off price. Meanwhile the 10-year paper is losing favour with the market again. Dealers say because the calendar year is already drawing to a close, and it���s unlikely that the central bank will auction this paper again.
The 6.90% coupon paper maturing in 2019 already has an outstanding volume of Rs 40,000 crore in the market.
Government bond prices continue to be under pressure, with traders predicting that the government would struggle to successfully execute auctions in the coming days. The 10-year benchmark bond yield ended largely unchanged at 7.08%, the market is preparing itself for another Rs 12,000-crore auction this week.
Late in the evening, the government announced its plans to raise Rs 12,000 through sale of three bonds including the 10-year benchmark security.
���The mood doesn���t look good for bonds, with traders getting tired of the Rs 12,000-crore auctions hitting the market week after week,��� said Anoop Verma, associate vice-president with Development Credit Bank. ���Although yields are attractive to build fresh positions, everybody���s afraid of having to incur further losses,��� he added.
The government raised Rs 12,000 crore through the sale of bonds last Friday, but at yields much higher than expected. Primary dealers underwriting this issue had to subscribe to over Rs 900 crore of newly-issued bonds, as the issue was undersubscribed at the cut-off price. Meanwhile the 10-year paper is losing favour with the market again. Dealers say because the calendar year is already drawing to a close, and it���s unlikely that the central bank will auction this paper again.
The 6.90% coupon paper maturing in 2019 already has an outstanding volume of Rs 40,000 crore in the market.
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