Market Round-Up

Updated: Nov 29 2002, 05:30am hrs
Call Money
Call rates closed easy on Thursday at 5.00-25% compared to their previous close of 5.20-40% levels. Call rates opened higher at 5.40-50% compared to their overnight close. There were little demand from borrowing banks in the opening session. But as demand for funds receded with the days progress, call rates dipped to their lower levels. The intra-day low was seen at 4.75%. However, most deals were struck at 5.30-40% levels. Low demand along with comfortable liquidity in the inter-bank system helped call rates rule easy. The RBI accepted all the 47 bids worth Rs 15,705 crore at its repos-auction at the cut-off rate of 5.50%. The NSE pegged its Mibid and Mibor at 5.30% and 5.45% respectively.
FORECAST: Call rates seen easy on Friday.

Spot Dollar
The rupee was under pressure due to month-end dollar demand. It closed against the dollar lower at 48.26/2650 compared to its previous close of 48.24/2450. Opening the day at 48.23/24, it was seen at 48.24/25 in late morning deals due to persistent dollar buying from corporates and importers. There was also demand from PSUs for repayment of their external commercial borrowings. "The day saw mostly a one-way downward movement," a dealer with a private bank said. Large state-run banks were also seen buying dollars, on behalf of the RBI. The intra-day low was seen at 48.2650, and the rupee closed at this level. Underlying rupee sentiment, however, remained positive because of continued dollar supplies from exporters and NRI remittances. The RBI fixed its reference rate for dollar at 48.24 (48.21).
FORECAST: The rupee seen rangebound on Friday.

Forward Premiums
Forward premiums closed higher on Thursday. The benchmark six-month annualised premium closed at 3.66% (3.58%) while the one-year annualised premium closed at 3.62% (3.51%). Some also booked profit as the rupee started depreciating, he added. On Wednesday evening, a senior RBI official commented that there would be no repo rate cut in the near future. Following this, players became a little cautious and premiums shot up sharply. There was not much cash demand due to the closing of the US market on account of a holiday. In month-wise premiums, the December dollar closed higher at 11/12 paise, while in the far forwards, the September 2003 dollar closed at 146/148 paise with the October dollar closing at 161/163 paise.
FORECAST: Premiums seen steady on Friday.

Gilts
Gilt prices came off their early highs in the late-evening deals following a comment by a senior RBI official that central bank had a bias towards discomfort with the recent slide in yields. The official also said that possibilty of an OMO sale was constantly under review. Prior to that, prices rose sharply at select maturities. The rally was purely liquidity-driven, dealers said. There was good demand for longer-end papers. The 8.07% 2017 paper which attracted major buying, was dealt at 6.6468% in the afternoon trades, from previous close of 6.6824%. The benchmark 10-year yield -- on the 7.40% 2012 paper -- was seen at 6.3171%, a new all time low level. Liquidity remained comfortable, buoyed by steady forex inflows which are absorbed by the RBI, and also by the usual domestic deposit accretions and receipts from the government.
FORECAST: Prices seen inching up on Friday.

Compiled by Atmadip Ray