Market Round-Up

Updated: Jul 28 2004, 04:55am hrs
Call Money
Call rates closed easy at 4.00-4.10% levels. Opening the day at 4.25-4.50%, call rates ruled mostly in the opening range. Heavy supply at the fag-end of the day pulled the rates down to 4% level. Mutual funds were seen lending at lower levels, dealers in the overnight market said. The RBI accepted 40 bids for Rs 16,765 crore at its 7-day repo auction and 8 bids for Rs 2,085 crore at the fortnightly repo. Inflows of Rs 2,279.78 crore are lined up for the week by way of interest payments on dated stocks and redemption of a 91-day treasury bill for Rs 500 crore. Last week, the inflows were to the tune of Rs 5,007.79 crore. Total inflows for the month is Rs 13,192.62 crore. There would be outflows to the tune of Rs 8,600 crore as 19 state governments would tap the market on July 28 through on-tap sales. Elsewhere, the National Stock Exchange (NSE) pegged its overnight Mibid and Mibor at 4.24% and 4.49% respectively.
FORECAST: Call rates seen easy on Tuesday.

Spot Dollar
Aggressive dollar selling by PSBs helped the rupee to close Monday four paise stronger at 46.29/30 per dollar even as corporates continued covering their short-dollar positions. Had it not been dollar selling by PSBs, the rupee would have touched the psychological 46.50 mark, a dealer with a PSB said. The RBI protected the 46.35 level, another dealer said. The rupee opened the day at 46.32/34 per dollar compared to its last closing of 46.33/34 on dollar demand from oil companies. But PSBs started selling dollars at higher levels immediately at the behest of RBI to push the rupee up to 46.29/31 in early deals. The intra-day high was seen at 46.26. Corporate dollar demand continued till the close of trades. Market remained choppy and dollar demand will weaken the rupee on Tuesday if RBI does not protect the 46.35 level, another dealer signed off. The RBI fixed its reference rate for dollar at 46.27 (46.22).
FORECAST: The rupee seen weakening on Tuesday.

Forward Premiums
Forward premiums softened on Monday, tracking the spot-rupee movement. The one-year annualised premium closed lower at 1.90% (1.95%) with the six-month annualised premium closing lower at 2.32% (2.35%). With heavy dollar selling by PSBs on the behest of RBI good receiving interest was also seen on the forward segment of the market. There mood in the market was cautious in the light of GTB fiasco, a dealer said, adding: Thats why maybe the RBI ensured good supply of dollars to keep the rupee under control. Heavy selling helped the rupee post a small gain on Monday, despite strong corporate dollar demand. Premiums remained easy for most of the day, but rose a shade on late-paying interests. The benchmark six-month premium closed at 55/56 paise. The August dollar closed lower at 12.25/12.75 paise (14/15 paise) while in the far forwards, the June 2005 dollar closed at 83/84 paise (84/85 paise).
FORECAST: Forwards seen higher on Tuesday.

Gilts
Prices on government securities fell by 10-15 paise in a thin and lacklustre market. With no positive factor to look up, market players remained generally cautious. The benchmark 10-year yield on the 7.37% 2014 paper closed at 5.90%, a tad higher than its previous closing of 5.90%. It opened 30 paise lower than Saturdays level, but some low-level buying had it rise to Rs 11.55 (Rs 11.75 on Saturday). Papers like 7.38% 2015, 8.07% 2017 saw the same trend. But every minor rise met with profit-selling, as the general outlook remains bearish. Deals worth only Rs 90 crore were seen at this paper. Total turnover on the NSEs wholesale debt segment was at Rs 1,400 crore. Its now purely a traders market. No one is taking long-term views on it, a dealer with a state-owned bank said, adding: So, sellers have little opportunity to sell.
FORECAST: Prices seen weak on Tuesday.

Compiled by Atmadip Ray