Market Round Up

Updated: Feb 26 2004, 05:30am hrs
Call Money
Call rates were rangebound on Thursday. The market was back at full strength after Tuesdays strike call, and trades were as usual with supplies more than enough to take care of the demand, a dealer with a primary dealership said. All eyes are now on the Reserve Bank of Indias (RBI) sale (re-issue) of the 5.84% 2019 for Rs 5,000 crore today. The sale will go through given the extent of liquidity in the system, a dealer with a primary dealership said pointing at the response to the RBIs repo auction on auction eve. The RBI accepted 59 bids for Rs 41,475 crore at its one-day repo auction. The sterilisation of forex inflow is also aiding liquidity, and we will see the current situation continuing for a sometime to come, a dealer with a European Bank said. The National Stock Exchange (NSE) pegged its overnight Mibid and Mibor rates at 4.28% and 4.50% respectively.
FORECAST: Trades to be affected by strike call on Thursday.

Spot Dollar
The rupee closed at a fresh two-week high against the dollar at 45.2400/2450. Opening the day at 45.2750/2850 from its overnight close at 45.2775/2825, the rupee gained on good dollar inflows. There was a feeling that while steady foreign fund inflows and export proceeds would continue to give the rupee support, month-end pressure may weigh on it a dealer said, adding: But there was enough dollar supplies to take care of month-end demand. The settlement day for Wednesdays spot-deals is Friday, the last trading day of the month. It was pointed out that inflows from foreign funds participating in the Centres ongoing privatisation will support the rupee. Foreign funds net purchases of domestic shares and debt papers rose to $631.6 million in February. The countrys forex reserves rose to $107.50 billion in the week ended February 13 from $106.60 billion the previous week.
FORECAST: Rupee seen a at current levels on Thursday.

Forward Premiums
Forward premiums eased on receiving interest. There were bouts of receiving and paying. Bunched up dollars after Tuesdays nationwide strike call hit the market, and pushed up the spot-rupee. Several exporters sold even as importers were seen converting for end-month, a dealer with a forex brokerage said. The spot-rupee has gained by around nine paise in the current week so far and barring the occasional blips, it has appreciated by 0.8% in the current calendar. The rupee had last ended on a better note at 45.23/24 on February 13, which was then, a 42-month closing peak. The six-month annualised forward cover opened at around 0.32% and was seen at 0.30% thereabouts at close of trades. I think if the forex loan market also remain buoyant, then dollar inflows will only go up as the story on the bourses will remain bullish, a foreign fund house source said.
FORECAST: Strike will affect trades on Thursday.

Gilts
Government security prices at the short- to medium-end rose by 8-25 paise while those at the longer end rise by over 35-40 paise on renewed buying interest after shrugging off inflation worries and the higher-than-expected MSF set up to sterilise forex inflows. The yield on the benchmark 10-year paper fell to 5.25% from its overnight level of 5.28% with the 6.72 %, 2014 bond ending higher by 20 paise at Rs 111.27/30. The 7.37% 2014 shot up to Rs 116.68 from Rs 116.35, the 7.38% 2015 rose to Rs 117.00 (Rs 116.87) and the actively traded 8.07% 2017 shot up to Rs 122.38/40 (Rs 122.30/32). On the NSEs wholesale debt segment, trades worth Rs 4,075.26 crore got done in 596 deals. The 8.07% 2017 saw trades worth Rs 455 crore at a weighted yield of 5.60%, the 7.37% 2014 for Rs 375 crore (5.23%) and the 6.25% 2018 for Rs 350 crore (5.69%).
FORECAST: G-Sec trades to be lumpy on Thursday.

Compiled by Raghu Mohan