Market Round Up

Updated: Feb 27 2004, 05:30am hrs
Call Money
Call rates were rangebound on Thursday. Opening the day at 4.25-4.40% levels, call rates moved in a narrow groove. Liquidity is ample. Despite the outflow of Rs 4,959 crore at the re-issue of the 5.64% 2019, liquidity was not an issue at all, and call rates closed a tad softer at 4.24-4.40%. At the Reserve Bank of Indias (RBI) sale (re-issue) of 5.64% 2019 for a notified amount of Rs 5,000 crore, 276 bids for Rs 8,487 crore were received and 149 bids for Rs 4,959.80 crore were accepted. The yield at the cut-off price of Rs 98.32 worked out to 5.8096%. The liquidity surfeit was also seen at the response to the one-day repos auction. The RBI accepted 59 bids for Rs 44,050 crore at the auction, which is reportedly a new record. Despite a huge outflow of over Rs 44,000 crore at the repos, an additional Rs 5,000 crore to the auction was of no concern to the market, a dealer said. The NSE pegged its overnight Mibid and Mibor rates at 4.28% and 4.50% respectively.
FORECAST: Call rates seen at 4.40% levels on Friday.

Spot Dollar
The rupee held rock steady against the dollar. Opening the day at 45.2750/2850 from its overnight close at 45.2400/2450, the rupee was seen in a very fine band throughout the day in shallow and directionless trades. Despite the anticipated month-end dollar demand, the rupee continues to strengthen due to rising trade and capital inflows, a forex dealer said. The rupee has gained by nearly 10 paise in the current week so far, driven up by strong trade and investment inflows. 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. The Reserve Bank of India (RBI) pegged its reference rate for the dollar at 45.24 from its overnight peg at 47.27.
FORECAST: Rupee seen at current levels on Friday.

Forward Premiums
Forward premiums shot up for the s second consecutive session today on persistent heavy paying pressure as banks and corporates continued with their usual month-end roll overs. The benchmark six-months forward dollar premiums payable in July closed at 12.50/13.50 paise, sharply higher from its overnight 9/10 paise and far-forwards maturing in December ended at 24.50/25.50 paise (19/21 paise). Cash/tom ended at 0.40/0.50 paise with cash/spot at 0.70/0.90 paise. 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. Despite the rupee ending a notch lower against the dollar today after late month-end dollar demand and a resurgent dollar overseas, the outlook on the local currency continues to be a bullish one.
FORECAST: Trades may perk up a bit on Friday.

Gilts
G-Sec prices remained flat in tight rangebound trades with gilts ending barely changed with a slight downward bias on modest profit-sales. The yields on the benchmark 10-year paper edged up to 5.25% from its overnight level of 5.24% with the 7.37% 2014 ending eight paise lower at Rs 116.58/60. The 6.72% 2014 closed at Rs 111.25/30, little exchanged from Rs 111.27/30 and the 7.49% 2017 moved down to Rs 116.65 from Rs 116.70. On the NSEs wholesale debt segment, trades worth Rs 2,944.32 crore got done in 421 deals. The 6.25 % 2018 was traded for Rs 420 crore at a weighted yield of 5.70%, the 8.07% 2017 for Rs 310 crore (5.62%) and the 11.99% 2009 for Rs 235 crore (5.02%). Repos and auction outflows did not weigh on the market heavily. At the RBIs sale (re-issue) of 5.64% 2019 for a notified amount of Rs 5,000 crore, 276 bids for Rs 8,487 crore were received and 149 bids for Rs 4,959.80 crore were accepted. FORECAST: G-Sec trades to be listless on Friday.

Compiled by Raghu Mohan