Swap rates have had a measured decline despite strong expectations of a series of policy rate cuts.
Five-year swap rates have dropped more than 70 basis points over the past one month, a sign that investors are betting the RBI may begin to chop policy rates soon
Swaps have been a better gauge of interest rate hikes and when they have not been accurate, swaps have at least been a true reflection of the inflation situation.
Siddarth Bhamre, head of equity derivatives, Angel Broking, says on CNBC-TV18's The Derivatives Show, an investor's ability to bear risk is key to participation in the derivatives market.
The BSE index closes up 2.11 percent at 18,744.93 and the broader 50-share NSE index ends 2.16 percent higher at 5,688.95, breaching a key technical resistance, as rate-sensitive stocks, like autos and banks rise on expectations the central bank will cut rates next month on a continued slump in global commodity prices.