Market Round-Up

Updated: Dec 25 2002, 05:30am hrs
Call Money
Call rates came off their early highs and closed lower at 5.65-75% on Tuesday as compared to the pervious close of 6.00-25%. Call rates ruled tighter in the morning and mounted to 6.50% amidst mild pressure on the inter-bank liquidity situation. Outflows towards the on-tap state government auctions, held on Monday, put early pressure on the funds. But after the allocation of bids, around Rs 5.000-6,000 crore flowed back into the system, a dealer said, adding that this helped call rates to ease in late-trades. The early tightness on the liquidity was evident from the fact that the RBI had received only five bids for a meagre Rs 855 crore at its one-day repos-auction. But with the improved fund-flow in the afternoon trades, call rates eased sharply towards the close. Most of the deals were struck at 5.75-80% levels.
FORECAST: Call rates seen easy on Thursday.

Spot Dollar
The rupee closed a tad lower at 48.02/03 on Tuesday after hitting successive highs for the sixth day. Opening the day almost steady at 48.00/01 compared to its overnight levels of 48.0025/0125, the rupee lost some grounds due to heavy dollar buying by state-owned banks, on the behest of RBI. The intra-day low was seen at 48.04 level. Later, as players offloaded their long-dollar positions ahead of the Christmas holiday, the rupee came off its early losses. Players do not want to hold any substantial position ahead of a holiday, dealers said. But towards the end, month-end dollar demand pushed the rupee down to close lower at 48.02/03 levels. Medium-term outlook for the rupee, however, remains favaourable against the backdrop of unabated dollar inflows and also due to dollars weaknesses against other major currencies. Meanwhile, the RBI fixed its reference for dollar at 48.01 (47.99).
FORECAST: The rupee seen gaining on Thursday.

Forward Premiums
Forward premiums held range-bound with a slightly upward bias. Both the six-month and the one-year annualised dollar premiums closed higher at 3.72% and 3.41% respectively. There was not much movement in the forward market, but premiums rose marginally, tracking the rupee movement, a forex dealer said. The rupee closed a tad lower at 48.02/03 compared to its overnight levels of 48.0025/0125. There was some early pressure on the liquidity situation, which improved in the afternoon, and that stopped forward premiums from rising sharply. In month-wise premiums, the December dollar closed steady at 2/3 paise while the March dollar closed at 43/45 paise. In the far forwards, the June dollar closed at 88/89 paise with the Sept and Nov dollar closing at 130/132 paise and 153/155 paise respectively.
FORECAST: Forwards seen steady on Thursday.

Gilts
Government securities prices rose in afternoon trades amidst improved liquidity condition. Select longer-end papers rose by around 80 paise, while prices at medium-end papers rose by around 30 paise. The benchmark 10-year yield on the 7.40 per cent 2012 paper was seen at 6.2737 per cent fairly close to its all-time low level of 6.2634 per cent hit on Saturday last and off the days high of 6.3174 per cent but lower than its Mondays close of 6.2969%. Good buying was also seen at the 10.81per cent 2026 paper which rose by 80 paise. In the morning, prices were seen falling with a slight strain in liquidity. But once the pressure was over, market players turned themselves into buying mode. Dealers said the upbeat outlook prevailed despite a slightly higher yield set at the 364-day T-bills auction.
FORECAST: Prices seen rising on Thursday.

Compiled by Atmadip Ray