Rupee gains on FII inflows
Mumbai: The rupee rose by 34 paise against the dollar due to strong FII inflows into the market. The rupee opened at 40.98/99 and saw an intra-day low of 41.04/05 before ending the day at 40.79/80 up from the previous close of 41.13.

Market participants expect the rupee to trade in the 41-41.1 range. In forwards, the six-month premia closed at 2.64 per cent (2.14 per cent) while the 12-month closed at 2.69 per cent (2.37 per cent).

Bonds: Bond prices crashed by nearly a rupee reacting to RBI's announcement of Treasury bill and government security auctions worth Rs22,000 crore this week.

The total traded volumes on the order matching stood at Rs2,510 crore (Rs4,445 crore). Market participants said the auctions this week would drain out excess cash from the system.

G-secs: The 7.49 per cent-10 year-2017 paper opened at Rs94.75 (8.28 per cent YTM) and closed at Rs94.27 (8.35 per cent YTM) against the previous close of Rs95.30 (8.19 per cent YTM).

The 8.07 per cent-10-year-2017 paper opened at Rs98.91 (8.23 per cent YTM) and closed at Rs98.92 (8.23 per cent YTM) against Friday's close of Rs99.54 (8.14 per cent YTM).

Call rates: The inter-bank call rates rose from its week-long low of 0.2-0.75 per cent to close at 3-3.25 per cent on Monday against the previous close of 0.25-0.35 per cent backed by the announcements of government securities and Treasury bills auctions by the Reserve Bank of India to suck out surplus liquidity from the system.

Reverse repo: In the first one-day reverse repo auction, the RBI received 27 bids for Rs26,120 crore while it accepted Rs1,994 crore. In the second one-day reverse repo auction, the RBI received 26 bids for Rs27,885 crore while it accepted Rs1,003 crore. There were no repo bids in the first and second one-day auctions.

The CBLO market saw 387 trades aggregating Rs34,144.55 crore in the 0.02-2.4 per cent range.
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Canara Bank rejigs home loan rates
Mumbai: Canara Bank has raised interest charged on floating rate home loans by 175-200 basis points and has also stopped mortgage lending at fixed rates due to with rising defaults. The bank has also decided to charge second-home buyers 25 basis points more, even if the borrower has not taken any loan for the first house.

Home loans above Rs20 lakh will carry a 25 basis points higher interest than loans up to Rs20 lakh. The bank is offering loans up to Rs20 lakh at 10.75-11.25 per cent.

According to a Canara Bank official, there has been a steep hike in rates as the bank had kept its home loan rates unchanged since mid-2006. All the revised rates are effective from June 1, 2007.

The bank has also discontinued loans at fixed interest rate from June 1. Loans sanctioned to second-house borrowers, since the start of 2007, will carry a 25 basis points higher rate even if the borrower had not taken a loan to buy the first home. The margin for purchase of a second home is also higher at 25 per cent.

Similarly, the bank now has 5 percentage points higher margin requirement for loans to buy an old house. The margin requirements for a loan to purchase an old house is 20 per cent and 25 per cent for loans up to Rs20 lakh and above Rs2 5 lakh respectively compared with 15 per cent and 20 per cent for buying a new house or a flat.
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