G-secs tumble on rising oil prices

Mumbai, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
Gilts tumbled on Monday following flaring global oil prices that triggered inflation fears. Also interest rate uncertaintes weighed down on bond values leading to fall in the prices of government securities.

Select government bonds continued to reel under selling even as call rates ruled steady at 5.00-5.10% at the overnight call money market in thin dealings, adversely affected by the incessant rains that lashed the city for the second day on Monday. Activity in the government securities market was confined to only a few key bonds, as most banks reported thin attendance and many primary dealers preferred to stay indoors on account of MET warning of heavy to very heavy rainfall in the city until Tuesday, said a debt dealer.

The yield for the 7.38% (2015) benchmark government security inched up to 6.99%. Among the most actively traded 7.27% (2013) government security dipped to Rs 102.25/35 from Rs 102.55/60. Also the 7.37% (2014) stock fell to Rs 102.50/60 from Rs 102.80/90 and the 8.07% 2017 paper tumbled to Rs 107.40/50 from Rs 107.90/108.00.

Some other securities to show sharp declines were the 10.25% government stock maturing in 2021 which settled at Rs 124.90/95 and the 7.50% stock maturing in 2034 closed at Rs 100.15/25.

At the overnight call money market, call rates ended at 5.00-5.05% after trading in a narrow range of 5.00-5.1%. Call rates opened at 4.95-5.10%.

Reserve Bank of India (RBI) mopped up a whopping Rs 30,880 crore at the one day fixed rate reverse repo auction on Monday at 5% from 46 bids, under the liquidity adjustment facility.

The domestic currency ended the day at Rs 43.4150 / 4225 a dollar compared to Saturdays closing level of Rs 43.49 . However the pound sterling turned dearer at Rs..76.76/79 per pound at the close of the interbank foreign exchange (forex) market on Monday.