(Updates to close)
MUMBAI, Dec 7 (Reuters) - Indian federal bonds were steady on
Friday with traders wary of fresh supplies next week, but
suspected central bank intervention in the currency market
improved the near-term outlook for cash, traders said.
The yield on the 10-year federal bond <IN079917G=CC> ended at
7.87 percent, unchanged from the previous close, but a tad lower
from an early high of 7.88 percent.
The government is scheduled to sell 70 billion rupees ($1.8
billion) of bonds between Dec. 7-14.
"New issues would definitely dampen sentiment," a trader with
a foreign bank said.
Traders said there were fresh cash inflows on Friday as the
central bank was seen buying dollars in the currency market.
According to the latest data, the central bank bought about
$52 billion through intervention in the first nine months of the
year, and is also seen as having played an active role in the
rupee market in October and November too.
Overnight cash rates <INROND=> ended at 4.25-4.35 percent,
down from the previous 6.50-6.60 percent, due to a dip in
borrowing on a reporting day for banks. They must report their
cash balances to the central bank on alternate Fridays.
Traders said a low inflation also helped sentiment. Data
released on Friday showed the wholesale price index rose 3.01
percent in the 12 months to Nov. 24, below the previous week's
rise of 3.21 percent.
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MARKET SNAPSHOT
Bombay Sensitive Index <.BSESN>
Indian rupee (/$) <INR=IN>
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($1=39.4 rupees)
(Reporting by Anurag Joshi, Editing by Mark Williams)
(([email protected]; Tel: +91-22-6636 9038; Reuters
Messaging: [email protected]))
Keywords: MARKETS INDIA MONEY