Market Round-Up

Updated: Oct 26 2002, 05:30am hrs
Call Money
Call held steady at 5.65-75% on Friday. Opening the day at 5.70-75% as compared to the overnight level, call ruled in a narrow range between 5.65% and 5.75% level. Most of the deals were, however, struck at 5.75%. Demand for funds receded as the day progressed amidst comfortable liquidity in the inter-bank system. The demand did fall in the afternoon session but still there was no panic and the rates remained steady. However, quite a few players decided to wait for the credit policy, said a market dealer. The RBI partially accepted 14 bids for 12,360 crore at its one-day repos-auction at the cut off price of 5.75%, while it received 14 bids for Rs 15,450 crore. Market players were expecting a repo rate cut soon, by at least 25 basis points. Meanwhile, the NSE pegged its overnight Mibid and Mibor at 5.69% and 5.77% respectively.
FORECAST: Call rates seen steady on Saturday.

Spot Dollar
The rupee closed at 48.37/38 per dollar, up by two-and-half paise from its Thursdays closing level of 48.3850/3950. It opened the day almost steady at 48.38/39. It went down marginally at the morning session to its intra-day low of 48.3850/3950. Month-end dollar demand put the rupee under pressure in early trades, a dealer said. At the afternoon trades, there was marginal recovery of the rupee and was seen at 48.37/38. At the fag end, players were seen winding up their long dollar positions ahead of the weekend. But sufficient dollar supply from the exporters prevented any fall in the rupee at close.

Sentiment for the rupee remained positive, dealers said. The RBI fixed its reference rate for the dollar at 48.43 (48.37), while it fixed the reference rate for the euro at 47.20 (47.29).
FORECAST: The rupee seen steady on Monday.

Forward Premiums
Forward premiums held more or less steady on Friday. The benchmark six-month annualised premium closed a shade higher at 3.95% (3.94%) while the one-year annualised premium closed lower at 3.97% (4.00%).

There was little movement in the forward market after the two volatile trading days, but premiums fell in the longer ends. The benchmark six month dollar premium, payable at end-March 2003, closed a shade lower at 77/79 paise. In month-wise premiums, the October dollar premium closed 0.50/1.25 paise, while in the far forwards, the August dollar closed lower at 161/163 paise with the September dollar closing higher at 176/177 paise.
FORECAST: Premiums seen rangebound on Monday.

Gilts
Gilt prices fell by around 10 paise at the medium end on profit selling. Market players now believe that the RBI would not reduce the Bank Rate in its credit policy and everybody is keeping their position open.

In the morning, prices at the medium-end fell by around 20-25 paise as everybody were offloading their positions. At the longer-end, the 30-year paper saw a fall in price of around 40 paise. Medium-end prices, however at the fag end, recovered by around 10-15 paise. The benchmark 10-year yield at the 7.40% 2012 paper were seen at 7.10%.

There were still two-way movements in the market, but prices are expected to crumble should there be no reduction in the Bank Rate in the credit policy, dealers said. In this background, players were becoming cautious before the policy announcement.
FORECAST: Prices seen falling on Saturday.

Compiled by Atmadip Ray