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Rupee ends gains; yields on bonds dip

Rupee ends gains; yields on bonds dip
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First Published: Thu, Jun 07 2007. 01 14 AM IST
Updated: Thu, Jun 07 2007. 01 14 AM IST
Mumbai: The rupee dropped on Wednesday, ending four days of gains, on concern a decline in the benchmark stock index will spur overseas investors to sell local equities.
Meanwhile, bonds fell for a third day, pushing 10-year yields to the highest in more than two weeks, on concern an increase in debt auctions will drain the spare funds at banks, the biggest buyers of government securities.
The yield on the 7.49% bond due April 2017 rose 3 basis points, or 0.03 percentage point, to 8.19%, the highest since 18 May, according to the central bank’s trading system. The price fell 0.21, or 21 paise per 100-rupee face amount, to 95.32. Bond yields move inversely to prices.
The rupee fell the most in a week as the Bombay Stock Exchange’s benchmark index, Sensex, had the biggest decline in more than a month. The rupee also dropped on speculation that the Reserve Bank of India (RBI) will sell the currency to stem a rally that has threatened to hurt exports.
The rupee fell 0.4% to 40.655 against the dollar as of the 5pm close in Mumbai .
It rose to 40.5125 on Tuesday, near a nine-year high. The currency’s 8.8% gain this year is the biggest among Asia-Pacific currencies.
RBI may have purchased dollars after companies such as Tata Consultancy Services Ltd, the nation’s largest computer-services provider, said a rising rupee is eroding profit.
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First Published: Thu, Jun 07 2007. 01 14 AM IST
More Topics: Money Matters | Currency |