G-Secs Shed Value On Profit Booking

Updated: Jan 26 2003, 05:30am hrs
The trend of rising G-Secs prices was reversed during the week. Papers across-the-board shed value on account of profit booking by market players.

The 7.49 per cent, 2017 closed lower at Rs 113.40 and the 7.46 per cent, 2017 dropped to Rs 113.30/35 levels on Friday. The 8.35 per cent 2022 ended sharply lower at Rs 123.30 at the end of the day on Friday.

Overall, the market saw rangebound movement through the week with differing liquidity conditions. Last weeks open market operations that sucked out close to Rs 11,000 crore from the market put pressure on the market early in the week. However, the RBI reversed the situation by partially rejecting bids offered at its daily repos auctions. The liquidity situation eased considerably in the second half of the week.

The RBI played its part in stopping the fall in prices by setting a higher-than-expected cut off at its 91 and 364-day T-bill auctions on Wednesday. The move resulted in prices rising for a short while before returning on the downward path.

One of the primary reasons for the fall in prices was the mounting tension in west-Asia and the Indo-Pak diplomatic conflict. A treasurer at a private bank said that this was also a correction that was required and the prices will gain ground again. He also added that prices will get steady in another few days and this downward phase was just temporary. During the week, turnover at the wholesale debt segment of the NSE was Rs 25,607.96 crore against last weeks turnover of Rs 42,083.50 crore. The total number of trades during the week was at 3,864 as against the last weeks level of 6,311. The highest volume was Rs 5,507.14 crore on January 22, while the lowest was Rs 2,360.12 crore on Saturday.

This week the weighted yields on securities with a maturity within 3 years, 3-7 years, 7-10 years and more than 10 years were quoted at 5.58 per cent, 5.75 per cent, 5.90 per cent and 6.10 per cent respectively. The weighted yields on T-bills maturing within 90 days, 91-182 days and 183-365 days were quoted at 5.55 per cent, 5.55 per cent and 5.53 per cent respectively.

Strong trade inflows and a lingering dollar overseas, continued to strengthen the rupee against the US currency and breached the key Rs 47.90 psychological barrier, despite sporadic dollar demand from state-run banks partly containing the rise. Unfazed by growing war fears and relatively high global oil prices, the rupee continued to garner support from sustained healthy flow of dollars from export proceeds and NRI remittances. In fairly active two-way trade at the interbank foreign exchange market during the week, the rupee ended at Rs 47.8850/8900 levels, sharply higher from previous weekend levels of Rs 47.9250/9350, but off peaks of Rs 47.87/88 struck in intra-day deals on Friday.

In the meantime, for the second time this month, Indias forex reserves soared by over $ one billion to cross a record high level of $72 billion in the week ended January 17. Forex reserves spurted by $1.058 billion to $72,400 million in the period under review, according to the RBIs weekly statistics.