G-Sec prices wobble, rupee dips

Mumbai, Nov 16 | Updated: Nov 17 2005, 05:30am hrs
Government securities market ended a tad weaker on Wednesday as liquidity mismatch continued. The bond market players were also concerned about the forth coming bond auction where government plans to borrow Rs 5000 crore. Prices of government securities fell by 2-4 paise from previous close.

The benchmark 7.38% government stock maturing in 2015 closed at Rs 102 with yields ruling at 7.09%. In the highly traded segment, the popular 7.37% government stock maturing in 2014 dipped to Rs 102.475 (6.97%) as against to Rs 102.505 on Monday. While the newly auctioned 7.49% government security maturing in 2017 closed at Rs 101.56 (yield at 7.28%) as compared to Rs 101.58 (yields at 7.28%) on Monday.

Liquidity squeeze in the system still is the concern. Though in the first half of trading session the prices moved up, they were pulled by the concern for liquidity, said a dealer from private sector bank.

Meanwhile the Reserve Bank of India (RBI) helped ease the pressure on liquidity by auctioning the both categories of treasury bills 91- day T -Bill and 182-day T -Bill. The cut-off for 91 day and 182 day T-bill auctions was pegged at 5.81% and 5.90%, respectively.

With the liquidity crunch prevailing in the market, the overnight call money market the call rates ended at 6.25%-6.35%. This can be witnessed by the LAF data released by RBI. The RBI absorbed Rs 100 crore in its one day reverse repo auction at a rate of 5.25%. While it infused Rs 3,600 crore in the system by means of one day repo auction at a rate of 6.25%.

The rupee dipped to 45.77/78 per dollar as against 45.7325/7425 per dollar on Monday. The domestic currency continued to weaken as there were worries regarding dollar strengthening vis-a vis other currencies and constantly increasing domestic trade deficit. With the markets closed on Tuesday supply for the dollar was seen in large number. However rupee continued to be under pressure, said a forex dealer from private sector bank.

Meanwhile on the forward market front the annualised premia inched up. The 6 months annualised premium payable in April closed at 0.52%, while the 12-month annualised premium payable in October ended at 0.44% on Wednesday.