Call money
Call rates held rangebound on Tuesday. Opening the day at 7.65-80%, a shadehigh from its overnight close of 7.60%, call rates ruled in a narrow rangebetween 7.60% and 7.90% during the trading sessions. Liquidity wascomfortable with good inflows from coupon payments and redemption of the12.70% 2001 paper. The first phase of CRR cut also releases Rs 2,050 croreinto the system. At close, call rates were seen at 7.60% levels. The ReserveBank of India (RBI) accepted one bid for Rs 6,500 crore in its one-dayrepos-auction at the cut-off rate of 7.50%, while no applications werereceived for its reverse-repo auction. Elsewhere, the National StockExchange (NSE) pegged its overnight Mibid and Mibor lower at 7.65% and 7.82%respectively. FORECAST: Call rates seen hovering between 7.25% and7.50% on Wednesday.Spot dollar
The rupee declined sharply against the dollar on Tuesday. Opening weak at46.63/64 from its overnight close of 46.6250/63, the rupee further weakenedamidst expectation of continued import demand and speculation over USinterest rates. Major state-run banks were seen buying dollar at forexmarket, however there was matching supplies from other banks, which helpedthe rupee to trade rangebound. "State-run banks reportedly accumulateddollar positions at 46.65 level in early trade in a bid to meet increasedmonth-end dollar purchases from corporates and importers later in thesession", a dealer said. At close, the rupee was seen at 46.63/64, down byone-and-half paise from its overnight levels. Meanwhile, the RBI fixed itsreference rate for dollar at 46.67 as compared to its previous fix of 46.63.In cross-currency trades, the euro and the pound-sterling both quoted lowerat 42.53/56 and 67.44/46 respectively.FORECAST: The rupee seen depreciating marginally on Wednesday.
Forward premiums
Forward premiums remained more or less steady on Tuesday. The six-month andone-year annualised premia closed a shade lower at 4.33% and 4.61%, ascompared to its previous close of 4.38% and 4.65% respectively. The rupeeended lower by one-and-half paise on sustained dollar demand from state-runsbanks and importers. There was some speculations on a US interest rate cutamong the market participants. Liquidity was comfortable with good inflowsfrom coupon payments and there was a release of Rs 2,050 crore after thefirst phase of cash reserve ratio (CRR) cut came into effect on Saturday. Inmonth-wise premiums, March dollar traded at 13.5/14.5 paise, while in farforwards, July dollar traded at 83/84 with August dollar at 101/102, whileJanuary traded at 206/208.FORECAST: Forward premiums seen easing on Wednesday.
Gilts
Bond prices went up sharply on Tuesday. The 11.40% 2008 paper was seen at Rs108.31, while the 11.30% 2010 and 11.03% 2012 seen at Rs 107.54 and Rs104.85 respectively. "Gilts market remained bullish as the market playersexpected another rate-cut and took their position ahead of the budget", adealer said. Liquidity was comfortable with good inflows from couponpayments and redemption of the 12.70% 2001 paper. The RBI accepted one bidfor Rs 6,500 crore in its repos-auction at 7.5%, while it did not receiveany applications for its reverse-repo auction. On the NSE's wholesale debtsegment, trades worth of Rs 3324.42 crore were seen. Trades worth of Rs 430crore was seen at 11.40% 2008 paper, while those in the 11.30% 2010 and11.03% 2012 papers amounted to Rs 425 crore and Rs 210 crore respectively.FORECAST: Bond prices seen moving up on Wednesday.
(Compiled by Atmadip Ray)
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
