G-Sec prices inch up, rupee wobbles

Mumbai, Nov 22 | Updated: Nov 23 2005, 07:28am hrs
With signs of easy liquidity, prices of government securities inched up in the system on Tuesday. Moreover, the negetive sentiment towards the fresh supplies didnt effect the trading of gilts. The benchmark 7.38% government stock maturing in 2015, remained untraded with its corresponding yields hovering around 7.07%. In the highly traded segement the 7.49% governemnt stock maturing in 2017 closed at Rs 101.85 with corresponding yields ruling at 7.24% as compared to previous days close at Rs 101.65 (yields at 7.27%).

While the prices of popular 7.37% government stock maturing in 2014 inched up to Rs 102.53 ruling at yield of 6.96% as against Rs 102.51 (6.97% yield) on Monday.

According to the market analyst large state-run insurer, Life Insurance Corporation (LIC), expected to pick up a bulk of the forth comming auction of 8.35% government stock (2022) worth Rs 5000 crore on Thursday. Moreover, it is seen shorter-term investors and banks with cash to spare had turned active buyers of short-and medium-term bonds.

Some buying movement was seen in the market, with the call rates easing and liquidity situation improving. Moreover, after a longer duration profit booking was seen in the market, said a dealear from private sector bank.

Meanwhile, on the overnight call money front the call rates eased up to 5.30-5.40% from 5.5-5.6% on Monday. The liquidity situation has considerably eased up. This can be evinced from the Reserve Bank of Indias (RBI) reverse repo auction data. RBI in its one day reverse repo auction absorbed Rs 7075 crores from the market at the predetermined rate of 5.25%.

With the oil firms making huge purchases of dollar and euro weakening against the dollar overseas affected the movement of domestic currency. The rupee weakened to end up at 45.8325/84 per dollar as compared to 45.75/76.

There was an ovwerall demand for dollar even on overseas front. In India demand for dollar was generated by the oil firms, said a forex dealer from a private sector bank.

On the forward market front the annualised premiums dipped from the previous closing level. The six month annualised premia maturing in April, closed at 0.52% as compared to 0.55%, on Monday.

While, the twelve month annualised premia maturing in October, ended at 0.435 as compared to 0.47% on Monday.