G-Sec prices recover, rupee strengthens

Mumbai Nov 21 | Updated: Nov 22 2005, 05:44am hrs
The government securities recovered from the previous days close levels in wake of improved money market liquidity on Monday. The prices of government securities inched up approximatly by 2-5 paise.

The benchmark 7.38% government stock maturing 2015 ended at Rs 102.10. With the corresponding yields ruling at 7.07%. In the highly traded securities segment the 7.49% government stock maturing in 2017 inched up at Rs 101.65 (yield of 7.27%) as against Rs 101.62 (yield of 7.27%) on Friday. While the popular 7.37 government stock maturing 2014 ended up at Rs 102.515 ruling at yield of 6.97%.

The liquidity position have improved and this could be seen by the call rates hovering around 5.5%. The bond market players were cautious as negetive sentiments still prevail for the forth comming auction, said a dealer from private sector bank.

Meanwhile, the Reserve Bank of India (RBI) on Monday announced a sale of government security. The GoI has announced the resale of 8.35% government stock maturing in 2022 worth Rs 5,000 crore to be conducted on November, 24 2005. After facing a tight liquity position and liquidity mismatch in the system, the situation seemes to have eased up. In the Liquidity Adjustment Facility (LAF), RBI didnt inject any funds in its one day repo auction. RBI managed to absorb Rs 1,465 crore from the system through the reverse repo auction at a predetermined rate of 5.25%.

More over on the overnight call money market the call rates dipped to 5.5-5.6% from the last weeks 6-6.15% indicating ease on the liquidity front.

The domestic currency inched up on Monday due to the euros bounce against the dollar overseas. The rupee ended at 45.76 per dollar stronger than Fridays 45.77/78 close. There was no major movement in the market, rupee showed a range bound movement. The rupee opened at 45.73/74 per dollar levels and closed at stable level of 45.76, said a forex dealer from a private sector bank.

Meanwhile, on the forward market front the annalised premium showed an incresing trend.

The six month annualised premia maturing in April closed at 0.55% as against 0.53% on Friday. While, the twelve month annualised premia maturing in Oct ended at 0.47% as compared to 0.46% on Friday.