Market Round-Up

Updated: May 27 2003, 05:30am hrs
Call Money
Call rates closed steady at 4.75/5.00 per cent on Monday amidst ample liquidity. The call rate opened at 4.75 per cent and remained in the same range the whole day and closed within the same level. There was no much demand for funds, and the banks were flush with funds could be seen from the more number of bids and higher investment in overnight repo at over Rs 25,000 crore, a state-owned bank dealer said. There was not much movement in the market even the trading remained lacklustre. There is no change expected in the call rate expected now till the cash reserve ratio (CRR) cut scheduled in a couple of weeks, another dealer said. The RBI has accepted all the 45 bids for Rs 25,415 crore through its daily repo window. Meanwhile, NSEs overnight Mibid and Mibor rates were at 4.81 per cent and 5.00 per cent respectively.
FORECAST: Call rates seen steady on Tuesday.

Spot Dollar
The rupee closed a tap higher against dollar at 46.8850/8950, even as the the state-run banks supported the dollar. The rupees previous close last Friday was at 46.89/90. The rupee opened at 46.87/88 and after the state-owned banks supported the dollar in the morning the rupee touched a low of 46.93, before settling at 46.8850/8950 towards the close. The sentiment on rupee is still bullish, but due to the intervention of state-run banks the domestic currency closed around the previous level, a public sector bank dealer said. Volumes in Mumbai market remained thin as the New York market remained closed yesterday and London market closed today, a foreign bank dealer said. In the forwards market, the premiums have firmed up across the board. Meanwhile, the Reserve Bank of India (RBI) fixed the reference rate for dollar at 46.90 against the previous rate of 46.94.
FORECAST: The rupee seen gaining on Tuesday.

Forward Premiums
Forward premiums closed sharply at heigher levels amid paying interest dominating the market, particularly in the wake of the state-owned banks stalling further strengthening of rupee. Both the six- and 12-month annualised premia were at 1.54 per cent (1.05 per cent) and 1.74 per cent (1.10 per cent) respectively. Forwards shot up sharply in the wake of payment interests dominating the market. Even though dollar inflows werer seen they could not stem the tide of payment interests towards the end of the month, a private sector bank dealer said. The premium for May 2003 closed almost at the previous level at 0.50/1.00 paise. The benchmark six-month dollar premium, payable at end-October, closed at 30/32 paise. In month-wise premia in the far forwards, the March 2004 dollar and April dollar closed at 56/67 paise and 74/76 paise respectively.
FORECAST: Premiums seen steady on Tuesday.

Gilts
The government securities market has seen a sharp rise in prices of longer-end papers spanning up to 80 paise in some cases. Opening at around the same levels as Saturday, the longer maturity G-Secs rose sharply to close higher, while the shorter-term papers lost some ground. The sharp rise in the longer-ends was also due to the RBI governor Dr Bimal Jalans soothing prediction on lower inflation rate in the latter half of the fiscal and softer interest rates outlook. However, he ruled out cut in repo rate at this moment, a private bank dealer said. The benchmark 10-year 9.81% paper closed at 130.26. The 11.40% 2008 shorter maturity paper closed at 127.51. The 7.40% 2012 bond closed at 111.64. The 8.07% 2017 bond closed at 119.40. The 8.35% 2022 paper closed at 124.61. On the NSEs WDM, volumes of Rs 8,535 crore were seen.
FORECAST: Prices seen rising on Tuesday.

Compiled by BSS Reddy