Call Money
Call rates ended lower at 8-8.15 per cent on Wednesday after AFTER ruling firmer in intra-day trades. Opening the day at 8.25-8.50 per cent from its Monday's close of 8-8.05 per cent, payment by subscribers to the Rs 5,000 crore bond auction affected sentiments, which led call rates to rise to an intra-day high of 8.60 per cent. "Stray deals also took place at 8.65 per cent," said a dealer. "The presence of several lenders and ample liquidity in the later part of the day pulled overnight interest rates down," said a dealer. "The market was not sure of the liquidity position after outflows on account of the bond auction," a dealer with a state-run bank said, adding: "Lenders were cautiously quoting higher, but soon there were many lenders and plenty of funds". I-Sec in a report said it appeared as if dollar inflows had augumented near-term liquidity.FORECAST: Call rates seen at 8.05-8.20 per cent levels on Thursday.
Spot Dollar
The rupee ended weaker at 43.3950/40 on Wednesday following active dollar-buying by the State Bank of India (SBI). The Indian unit opened firmer at 43.37/3750 and hovered in a thin range as supplies matched demand for the greenback. Sudden purchases of dollars by the SBI led the rupee to fall to an intra-day low of 43.4150. "The SBI's bids started around the 43.38 level and caught the market unawares," a foreign bank dealer said. The rupee recovered on off-loading by local banks, who sold on behalf of exporters. The market was already sitting short of dollars. They were hoping to cover today since spot-dates for today and Monday are the same," a dealer said. Markets across most centres were closed on Tuesday and this had raised hopes there will be a lot of dollar supplies on Wednesday, dealers said.
FORECAST: Rupee seen a shade firmer on Thursday.
Forward Premiums
The forward market remained dull on Wednesday with monthly premiums quoted at almost the previous levels. The six-month premium ended at an annualised 4.90 per cent, little changed from Monday's 4.91 per cent. "There was receiving by some banks, which led to the near forward premiums to ease in the morning session," a dealer said. Monthly premiums at close were 1/1.5 paise for November, 16.5/17.5 for December, 38/39 for January, 53/54 for February, 70/72 for March, 90-91 for April, 108/110 for May and 126/128 for June. The overall trend in the forward market remained stable. "Forwards up may firm in the coming days. There is a chance of the six-month premium crossing 5% if the month-end demand materialises," said a dealer. "There could be the typical month-end demand for dollars coming up from state-run enterprises", a said.
FORECAST: Forward premiums seen at the same levels on Thursday.
Gilts
Bond prices were quoted at higher levels as bullish sentiment prevailed in the gilts market on Wednesday. The 11.99 2009 per cent ended at Rs 103.26 (Rs 103.13), 12.29 per cent 2010 at Rs 104.70 (Rs 104.56), 12.40 per cent 2012 at Rs 104.74 (Rs 104.60) and 11.83 per cent 2014 at Rs 100.71 (Rs 100.53). "Sustained buying by players indicates that the liquidity levels in the system remain intact despite a Rs 5,000 crore outflow on account of the twin bond auction. Bonds were quoted around 9-10 paise higher, though the firmness was more reflective in the longer tenor paper, which rose by 13-14 paise. Call rates quoted firmer in intra-day trades following payout for the bond auction. Call rates touched an an intra-day high of 8.60 per cent, and there were reports of stray deals at 8.65 per cent.
FORECAST: Gilts seen a shade firmer on Thursday.
Compiled by Anurag Joshi
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.