G-Sec prices, rupee recover

Mumbai, Nov 23 | Updated: Nov 24 2005, 06:12am hrs
Prices of government securities rallied in wake of the improved liquidity in money market. Moreover, the domestic bond market also received a fillip following the rally in US treasuries on signs of the Federal Reserves interest rate hike may be nearing an end.

The prices of longer end paper shot up by 35-40 paise. While, the short end paper showed a price rise of 5 to 7 paise. The benchmark 7.38% government stock maturing in 2015, closed at Rs 102.20 with its corresponding yield ruling at 7.06%. Among the actively traded securities, the 7.49% government stock maturing in 2017, ended at Rs 102.22 with its corresponding yield of 7.20% as against its previous close at Rs 101. 85 (7.27%).

While, the 7.37% government stock maturing in 2014 ended at Rs 102.595, ruling at corresponding yields at 6.96% as against its earler close at Rs 102.53 (6.96%). The debt market witnessed profit booking at different levels as debt investors gained confidence on signs of the Fed halting its interest rate hikes. There was rally in the market, mostly for the longer end stocks. Even the volumes in market have grown drastically following the ease in liquidity position, said a dealer from private sector bank. Meanwhile, in the overnight call money market, the call rates ended stable at 5.30-5.40% with substantial liquidity in the system. RBI in its one day reverse repo auction absorbed Rs 8,140 crore from the market.

RBI also announced the results for its weekly and fortnightly treasury bill (T-bill) auction worth Rs 1,500 crore. The cut-off yield for the 364 day T-bill was set at 5.937%, while that of the 91 day T-bill was set at 5.736%. The domestic currency regained strength on Wednesday, following the strong inflows from the FIIs in the domestic market. The rupee strengthened from the previous sessions two-week low on Wednesday, to close at 45.7550/76 per dollar, off an intra-day high of 45.7125 but stronger than its previous close of 45.8325/84. However, simultaneous demand of dollar from the oil importers blocked any major rise in the domestic currency.

In the forward market, the six months annualised preimium payable in April closed at 0.55% and the 12-month annualised premium payable in October 06, stood at 0.46% at closing.