CALL MONEY
Call rates closed around eight per cent on Tuesday as demand for funds remained low in the afternoon session, with most banks having covered their positions ahead of reporting Friday. Call rates opened at 8-8.10 per cent, little changed from Monday's close of 7.90-8 per cent. "Call rates moved up to 8.25 per cent during mid-morning trades as some banks faced temporary mismatches. However, in the afternoon session rates fell as demand for funds declined," a dealer in a private bank said. The call rates closed at 7.95-8.05 per cent. Dealers said the outflow of Rs 636 crore on account of the sale of four state government securities impacted call rates marginally. The Reserve Bank of India (RBI) conducted the auctions on Monday. Dealers said that there was some demand to pay back refinance availed from RBI at 8 per cent.
FORECAST: Call rates seen steady on Thursday.SPOT DOLLAR
The rupee ended a slightly firmer on Tuesday. The rupee opened at 43.60/61, as compared to Monday's close of 43.61/615. Dealers said that there was good amount of inflows from exporters. The rupee ended at 43.58/585 per dollar, after it opened at 43.60/61 and compared with Monday's close of 43.605/615. The rupee recovered after it tumbled to a 16-month low on Monday which dealers suspected was on account of firm international oil prices, which had climbed to their highest levels since the 1991 Gulf War. Dealers said though rising oil prices remained a concern to the forex market, the day's flows boosted confidence in the rupee. The SBI, which had pushed the rupee below the 43.60 level on Monday was quoting throughout the day at 43.58/59. Cash/spot ended at 1-1.25 paise, cash/tom at 0.5-1 paise and tom/spot at 0.25-0.75 paise. The RBI fixed its reference rate for the US dollar at 43.58 as compared to Monday's fix of 43.58.
FORECAST: SBI seen impacting rupee's movement on Thursday.
FORWARD PREMIUMS
Forward premiums remained active on Tuesday. The monthly premiums came down moderately as fresh receivings hit the market. "There were some import cancellations on the long-end," a state-run bank dealer said. "The cut in CRR has already been factored into the rates and we will see rates moving out of the current range only after an announcement has been made," a dealer at a private bank said. The six-month forward premiums closed on Tuesday at an annualised 3.14 per cent after opening steady at Monday's closing level of 3.21%. "Good liquidity conditions in the money market, which saw the call rates at the usual 8 per cent levels aided the easing of premiums," a dealer with a foreign bank said. In the near end, January dollars ended at 1/1.5 paise and February at 12/13 paise, while in the far forwards June at 57/58 paise and July at 69/70 paise.
FORECAST: Forward premiums seen tracking spot-rupee on Thursday.
GILTS
Bond prices ruled weak on profit-taking by players on expectations of an government security auction on Tuesday. "Talk of a fresh bond auction to sterilise Rs 3,000 crore of redemptions on February 3 led to some offloading by players," a dealer said. Dealers said that the state loan auction on Monday, which has led to outflows of Rs 636 crore aided the bearish sentiment. Four state governments raised the amount through a ten-year bond at 11.30%. Bonds on the short end declined by 3-4 paise, while in the long-end they eased by 10-15 paise. Bond prices had bottomed out at this level and expect buying support from players in the coming days. At close, the 11.83 per cent 2014 was traded at Rs 104.36 (Rs 104.49); 11.99 % 2009 at Rs 106.43 (Rs 106.48) with the 12% 2008 at Rs 106.78 (Rs 106.80).
FORECAST: Gilts seen holding on Thursday.
-- Compiled by Anurag Joshi
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