Prices of government securities (G-Secs) crashed on Friday after the release of the inflation data, which pegged inflation at 7.51 per cent for the week ended July 24. Reacting to the news, prices fell Re 1 in the following bids and continued to fall another 30 paise or thereabouts on persistent selling.On the foreign exchange market, the rupee also fell to 46.4950 per dollar as panic gripped the foreign exchange market as well. The rupee, however, closed at 46.36/37 per dollar, on heavy dollar selling by state-owned banks at the behest of RBI. Estimates peg RBI’s dollar sales at around $150-200 million.‘‘The market has taken aback. You may remember government officials saying that everything is under control and then this is the outcome. Nobody will believe them now,’’ said a dealer. Market players were expecting inflation at 6.65-6.70 pc. The benchmark 10-year yield at the 7.37 per cent 2014 paper closed at 6.282 per cent compared with its overnight level of 6.134 per cent. The paper opened the day with a yield of 6.137 per cent and rose to 6.315 per cent in a panic reaction to the news.The rise in crude oil prices, which was seen at $44.77 a barrel in the Asian market from $42 a barrel on Thursday, also dented market sentiment. ‘‘These movements in oil prices had not been factored in the inflation figure,’’ a dealer said, adding the market would be cautious next week.
