Call eases, rupee depreciates, G-Secs move up

Mumbai, Dec 2 | Updated: Jan 3 2006, 07:10am hrs
With easing of liquidity conditions, government securities edged-up on Monday, as prices registered an increase, with debt investors seeking comfort from signs of improvement in increased government spending and interest payments of about Rs 10,000 crore on a Special Deposit Scheme run for investment by the Employees' Provident Fund.

Among the actively dealt securities, the 11-year 8.07% stock rose to Rs 106.74 with its yields ruling at 7.1748%, against its previous close at Rs 106.56 (7.1956 %). Investors also keenly awaited another round of issuances of government securities. According to its October-March borrowing calendar, the government is set to raise Rs 10,000 between January 3 to 11, in bonds with maturities of 5-9 years and 20 years and above.

Meanwhile, in the inter-bank call money market, call rates eased somewhat, to close at 6.0-6.2%, as compared to the previous close of 6.50-6.60 %, as liquidity conditions improved. The Reserve Bank of India (RBI) mopped up Rs 3,970 crore through its reverse repo auction, while it injected Rs 15,770 crore through its repo window.

In the forex market, a lacklustre trading session marked the domestic currency weakening on Monday, amid concerns of spiralling global oil price movements. Dealers said, a rise in US oil futures to above $61 per barrel, on worries of low US fuel stocks and expectations of reduction in the OPEC output in January, proved to be a dampener for forex investors.

The rupee ended the day at 45.09/10 per dollar, 0.13% weaker than Friday's 11-week closing peak of 45.03/04. Concerns for a widening trade deficit made the rupee move in a rangebound manner. "The market volumes were very low, since global markets are closed today. However some buying interest was seen as rupee is expected to open at 45.15 levels, on account of increased demand for dollar that is expected tomorrow. The demand for the dollar was seen towards end of the trading session," said a forex dealer from the private sector bank.

Meanwhile on a forward market front, the premiums dipped on Tuesday. The six-month annualised dollar premium maturing in June ended at 1.15 % as compared to its previous close of 1.34%, while the twelve-month annualised dollar premium maturing in December ended at 0.90 % as against 1.01% on Friday.