Call money
Call rates held a shade above 10% levels on Monday. Opening the day at 10-10.25% from its last close at 10-10.50%, call rates ruled in the 9.75-11% band during the day. "The market witnessed heavy covering by banks in the morning fearing liquidity tightening on account of the auction of the 11.03% 2012 for Rs 4,000 crore", a dealer said. The RBI accepted 167 bids for Rs 4,000 crore out of the Rs 5,635.75 crore from 200 bids at a cut-off price of Rs 97 and a YTM of 11.4976%. A few banks were also seen borrowing as there is a one-day bank strike on Wednesday when clearing operations are seen getting affected. Demand for funds receded and liquidity improved as the Reserve Bank of India (RBI) injected Rs 4,355 crore through its one-day reverse repos auction at 10%, and accepted 36 bids. At close of trades, call rates were seen at 9.75-10%. Elsewhere, the National Stock Exchange pegged its overnight Mibid and Mibor at 10.81% and 11.17% respectively.FORECAST: Call rates seen holding current levels on Tuesday.
Spot dollar
The rupee continued to be slight pressure in intra-day trades on Monday on demand for dollars from corporates and importers. Opening the day at 46.73/75, slightly lower from its weekend's close at 46.7300/7350, the rupee fell in intra-day trades to 46.75/76. "Steady dollar demand from corporates and importers weakened the rupee, but adequate local dollar supplies was there to cope with the buying interest", a dealer said. Renewed concerns of rising oil prices and a slow down in foreign capital inflows were also cited as reasons for the slight weakening in the the rupee. The rupee fell by over 12 paise last week on sustained light dollar demand from market operators amidst thin supplies. "Spot-trades remained quiet and range-bound due to lack of market-moving factors", dealers said. The rupee was seen at 46.75/76 at close of trades. Cash/tom quoted at 0.55/0.65 paise with cash/spot of 1.70/2 paise. The RBI pegged its reference rate at 46.76 as against 46.74 on Friday.
FORECAST: Rupee seen at 45.76/77 levels on Tuesday.
Forward premiums
Forward premiums were steady on Monday. The six-month and one-year annualised forward premia closed higher at 4.41% (4.28%) and 4.34% (4.33%) respectively. "There was not much of activity in the forward segment as the rupee was more or less steady... the perk up in the call rates to 11% levels and the auction of the 11.03% 2012 for Rs 4,000 crore had no effect on forward premiums", a dealer with a Gulf-based bank said. The RBI accepted 167 bids for Rs 4,000 crore out of the Rs 5,635.75 crore from 200 bids at a cut-off price of Rs 97 and a YTM of 11.4976%. Forward premiums also eased after the RBI injected Rs 4,355 crore through its one-day reverse repos auction at 10%. November dollars quoted at 9/10 paise while in the far forwards, April quoted at 90/92 paise while May quoted at 104/106 paise.
FORECAST: Premiums seen holding steady on Tuesday; call rates hold key.
Gilts
Gilt prices held steady on Monday, but dipped by 10 paise after results of the RBI's auction of the 11.03% 2012 for Rs 4,000 crore came through.
"Trades were dull in pre-auction trades, but prices fell by about 10 paise after the auction results came through... the only positive factor is the State Bank of India's mop of $5.25 billion through its `India Millennium Deposit' offering", a dealer with a primary dealership said. The RBI accepted 167 bids for Rs 4,000 crore out of the Rs 5,635.75 crore from 200 bids at a cut-off price of Rs 97 and a YTM of 11.4976%. The newly issued bond fell to Rs 97.06 in post-auction trades. On the National Stock Exchange's wholesale debt segment, trades worth Rs 1,132 crore were seen.
Trades worth Rs 275 crore were seen in the 11.40% 2008 while those in the 11.03% 2012 and 11.30% 2010 amounted to Rs 175 crore and Rs 130 crore respectively.
FORECAST: Bond prices will fall a shade on Tuesday.
(Compiled by Atmadip Ray)
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.