Call Money
Call rates were stable and moved in a narrow range of 8.30-9.10% on Wednesday. Opening the day at 8.50-9.10% from its close at 8.95-9.00%, call rates fell to 8.25-8.50% levels during the day on low demand for funds. "Call rates opened at higher level as there was early trade demand for funds from banks, but rates came down after the demand was met and no new players ventured into the market. There was ample liquidity in the market", a dealer said, adding: "... as Reporting Friday is due to fall after two days, most of the banks did not venture into the market". At close, call rates quoted at 8.25-8.50%. The Reserve Bank of India sucked out Rs 5,050 through its repos-auction - Rs 4,000 at its one-day repos and Rs 1,050 at its five-day repos, both at 8.50%. No bids were received at the reverse-repo auction. The NSE pegged its overnight Mibid and Mibor at 8.43% (10.11%) and 8.69% (10.30%) respectively.
FORECAST: Call rates seen holding current levels on Thursday.Spot dollar
The rupee held steady against dollar on Wednesday. Opening the day at 46.29/30 from its previous close at 46.30/31, the rupee fell a shade during the day to 46.33/34 level due to demand for dollars from state-run banks. "Market sentiment improved after the defusement of tension in middle-East after both parties to peace talks decided to take steps to put an end to wave of violence... this has lifted the uncertainty of the past few days", a dealer said, adding: "The improved situation and the inflow of dollars after banks unwound there long-dollar position saw the rupee improve a shade against the dollar during the day, but dollar-demand from state-run banks saw the rupee come down lower". At close, the rupee was seen at 46.32/33 The Reserve Bank of India pegged its reference rate for the dollar at 46.33 against its previous peg at 46.36.
FORECAST: Rupee seen gaining a shade on Thursday.
Forward premiums
Forward premiums softened on Wednesday on account of firmer trend in rupee. The six-month annualised premium was quoted at 4.31per cent (4.74) with the one-year at 4.54 per cent (4.82per cent). "Forward premiums quoted a shade lower as the Indian currency performed well against the US's currency,dollar, because of improvement in the situation of middle-east crisis and also due to unwinding of long-dollar positions by banks", a dealer said.October dollars quoted at 6/6.50 paise while in the far forwards, April quoted at 105/107 paise and May at 120/122 paise.
The rupee was steady during the day and moved in the narrow range of 46.29/46.34. Cash/spot was quoted at 0.75/0.80 paise with both cash/tom and tom/spot at 0.35/0.40 paise a piece.
FORECAST: Premiums to move in a steady to softer range on Thursday.
Gilts
Bonds prices went a shade higher. The 11.40% 2008 was traded at Rs 99.8300 and 12.50% 2004 was traded at Rs 105.1000. "There was an uptick in bond prices as the rupee performed well against greenback due to the defusement of tension in middle-east and ample liquidity in the market", a dealer said. Softer call rates also helped buoy bond prices. Call rates were stable and moved in a narrow range of 8.30-9.10% on Wednesday. Opening the day at 8.50-9.10% from its close at 8.95-9.00%, call rates fell to 8.25-8.50% levels during the day on low demand for funds ahead of Reporting Friday. On the NSE's wholesale debt segment, trades worth Rs 1,197.06 were recorded. Deals worth Rs 275 crore were seen in the 11.40% 2008 at a weighted average yield of 11.43% with those in the 11.30% 2010 at Rs 210.00 crore. The 12.50% 2004 was traded for Rs 165.00 crore at a weighted yield of 10.70%.
FORECAST: Bond prices seen moving up a shade on Thursday.
(Compiled by George Glace).
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.