Call Money
Call rates went up marginally on Wednesday. Opening the day at 7.40-50%, from their previous close of 7.10-20%, call rates moved up a shade owing to heavy demand for funds to meet banks' reserve requirements ahead of the advance tax outflows from tomorrow. Market participants expect tight liquidity in the system for the last half of the week due to advance tax outflows. Call rate moved up drastically to its intra-day high of 9.75%. "However, most of the deals were struck around at 7.40-50% levels," a dealer with a primary dealership said. Call rates ended around 7.25%, higher from Tuesday's closing levels of 7.10-7.20%. The RBI accepted two bids for a meagre Rs 140 crore at its one-day repos-auction at the cut-off rate of 7%, while it did not receive any applications for its reverse repo. Elsewhere, the NSE pegged its overnight Mibid and Mibor at 7.29% and 7.49% respectively.
FORECAST: Call rates seen moving up marginally on Thursday.Spot dollar
The rupee continued to be under pressure against the dollar on Wednesday. Opening at 46.68/70, lower from its overnight close of 46.65/66, the rupee weakened by four paise amidst bearish market sentiment. The turmoil on the political front made the participants feel bearish," a dealer said. There were worries of worsening FII that led to huge dollar outflows. However, the dollar sales by state-run banks relieved the pressure on the rupee in the end of trades. The rupee was seen at its intra-day low at 46.72/73 while it closed at 46.66/67, a shade down from its overnight levels. Meanwhile, the RBI fixed its reference rate for dollar at 46.69, against its previous fix of 46.61. In cross-currency trades, the rupee strengthened against both the euro and the pound-sterling, reflecting both the currencies' drop against the dollar, and the euro quoted at 43.24/26, while the pound-sterling quoted at 68.72/75.
FORECAST: The rupee seen steady on Thursday.
Forward premiums
Forward premiums moved up on Wednesday. The premiums continued to rise on persistent paying pressure following the nervous spot rupee. The six-month annualised premium ended higher at 4.53% against yesterday's closing level of 4.42% while the one-year annualised premium closed 4.70% as against its overnight level of 4.60%. The premiums went up with the rupee depreciating continuously. The rupee today closed at 46.66/67 amidst concerns about uncertainties over the stock prices and political turmoil. "The advanced tax outflows from Thursday would help the forward premiums to held steady in the last half of the week," a dealer said. The short-end premiums remained more or less steady while the premiums in far forwards moved up by two/three paise against their previous closes. March dollar traded at 7.25/7.75 paise, while in the far forwards, August traded at 96/97 with September at 113/114.
FORECAST: Forward premiums seen rangebound on Thursday.
Gilts
Bond prices were volatile amidst political turbulence on Wednesday. The secondary market for securities continued to encounter selling pressure causing bond prices to fall drastically across all maturities. The medium tenor papers and the longer maturities declined by around 40 paise on an average. However, the benchmark 11.40% 2008 paper fell by 90 paise and closed at Rs 107.90, while the 12.50% 2004 closed at Rs 108.50 and 11.30% 2010 at Rs 107.65. The advance tax outflows from Thursday would reduce liquidity in the system. The RBI accepted two bids for Rs 140 crore at its repos-auction at 7%. On the NSE's wholesale debt segment, trades worth Rs 2,425 crore were seen. Trades worth Rs 680 crore were seen in the 11.40% 2008 paper, while those in the 12.50% 2004 and 11.30% 2010 traded at Rs 330 crore and Rs 315 crore respectively.
FORECAST: Bond prices seen more or less steady on Thursday.
(Compiled by Atmadip Ray)
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
