Call Money
Call rates perked up to 8.75% in intra-day trades on Wednesday. Opening the day at wide 8.25-8.50% call rates moved up to 8.75% on good demand for funds ahead of reporting Friday. "The perk up in call rates was largely on account of the outflows towards the auction yesterday", a dealer said, adding: "Slightly tight conditions prevailed owing to last minute demand to cover reserve needs". On Tuesday, the Reserve Bank of India (RBI) auctioned the 11.30% 2010 for Rs 3,000 crore. "A few bank covered heavily in the morning itself. Absence of some major lending banks also put pressure on liquidity. However, once the demand is over, the rates started moving down and closed at 8.00-8.10 per cent", an analyst with a primary dealership said. Advance tax outflows are conservatively estimated at around Rs 5,500 crore, and start on Friday. The National Stock Exchange pegged its overnight Mibid and Mibor at 8.42% and and 8.61% respectively.
FORECAST: Call rates seen at 8.30% levels on Thursday.Spot dollar
The rupee held rocksteady against the dollar on Wednesday. Opening the day at 46.7650/7700, the rupee held these levels in intra-day trades on slight demand for dollar from banks and corporates. "The rupee opened nearly steady at 46.7650/7700, moved upwards gradually on good dollar sales by some state-run banks coupled with very thin import demand. The rupee was quoted at Rs. 46.7450/7550 at mid-session", a dealer with a forex brokerage said. Cash/spot and cash/tom premiums finished at 0.50/0.60 paise and 0.25/0.30 paise respectively. "Stray corporate dollar demand continued to exert mild pressure on the rupee in mostly shallow and listless early trade", a dealer said. Banks enjoyed dollar-liquidity thanks to the SBI's $5.5 billion `India Millennium Deposit' (IMD) inflow. The RBI's weekly statistical supplement released on Saturday said that the country's forex reserves increased by $900 million to $39 billion.
FORECAST: Rupee seen at 46.7550/76 levels on Thursday.
Forward premiums
Forward premiums quoted higher a shade in intra-day trades on Wednesday, but finished steady. "The forward dollar market remained dull and premiums after moving narrowly ended slightly lower", a dealer said, adding: "A steady spot-rupee at 46.77 levels, and lacklustre paying interest saw premiums hold firm. The six-month and one-year annualised premia closed lower at 3.85% and 4.07%. December dollar quoted at 4.5/5 paise, January 18/19 paise, February 32/33 paise, March 48/49 paise and April 65/66 paise. "Higher call rates at 8.75% in intra-day trades on account of the outflows towards the auction yesterday had no impact on forwards", a dealer said. On Tuesday, the Reserve Bank of India (RBI) auctioned the 11.30% 2010 for Rs 3,000 crore. Import dollar demand was very negligible in view of the comfortable foreign exchange reserves position, and steady oil prices.
FORECAST: Forward premiums will quote steady on Thursday.
Gilts
Bond prices perked shade on Wednesday. The 11.40% 2008 was seen at Rs 102.47 with the 11.50% 2009 at Rs 102.45 levels. "Tighter call rates at 8.75% in intra-day trades on account of the outflows towards the auction yesterday had no impact on bond prices... there was no rally like in the pos-auction trades on Tuesday. Bond prices were more or less steady", a dealer with a primary dealership said. On Tuesday, the Reserve Bank of India (RBI) auctioned the 11.30% 2010 for Rs 3,000 crore. On the National Stock Exchange's (NSE) wholesale debt segment, trades worth Rs 1,731.99 crore were seen. Trades worth Rs 345 crore were seen in the 11.03% 2012 while those in the 11.40% 2008 and 11.30% 2010 amounted to Rs 325 crore and Rs 255 crore respectively.
"Trades will pick up once the advance tax outflows are over with", a dealer with a European bank said.
FORECAST: Bond prices may gain a shade on Wednesday.
(Compiled by Raghu Mohan)
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