Market Round-Up

Updated: May 22 2003, 05:30am hrs
Call Money
Call rates closed almost steady at 4.75/5.00 in the strike-hit trading in the call market on Wednesday. There were no trades reported in our bank today, due to strike by the bank unions across the country. Only mutual funds were seen lending in the market, but no bank, a state-owned bank dealer said. Most of the labour unions in the country have given a call against the privatisation and the (alleged) anti-labour policies of the government. Clearance was suspended today in the wake of the strike in many of the state-owned banks across the country. Even if there had been a few trades, they must have been clinched in the same range as the previous close (4.80-5.00 per cent), a private sector bank dealer said. The RBI has accepted all the 29 bids for Rs 12,495 crore. Meanwhile, NSE failed to give

its overnight Mibid and Mibor rates due to strike in the banking sector.
FORECAST: Call rates seen steady on Thursday.

Spot Dollar
The rupee continued its three-day gaining streak, but at a lesser pace, by moving up by four paise against the dollar in a volatile market. The rupee close at 47.86/87 against the previous close of 47.90-91, on the back of sustained dollar inflows from exporters and investors. With this, the total gain in the three consecutive sessions is about 28 paise. The rupee opened at 47.88/89, went up to 47.74 and later went up to 47.90/91, before closing down at 47.86/87. But for the intervention by state-owned banks, the rupee would have gained even more, a dealer said. The market is awaiting the comments of US Federal Reserve chief Alan Greenspan before a Congress committee at 13.30 GMT, a dealer said. In the forwards market, there was a reversal in the anomaly in 6-month and 12-month premiums witnessed on Tuesday. Meanwhile, the RBI fixed its reference rate for dollar at 46.76 against the previous rate of 46.94.
FORECAST: The rupee seen gaining on Thursday.

Forward Premiums
Forward premiums closed almost at the previous day levels, except in the long-end, in a volatile market. The peculiar condition of the 6-month annualised premium surpassing that of the 12-month forwards witnessed on Tuesday has been reversed. Both the six- and 12-month annualised premia were at 0.30 per cent (0.48 per cent) and 0.36 per cent (0.35 per cent) respectively. The far forward of April 2004 opened at 12-14 paise, later went down to 6.50, only to spiral up to 22 paise, before closing at 17/18 paise. The exporters booked profit in latter trades by selling the forwards bought earlier, a dealer said. The premium for May 2003 closed at the previous level of 1.00/50 paise. The benchmark six-month dollar premium, payable at end-October, closed at 8/9 paise (8.00/50 paise). In month-wise premia in the far forwards, the March 2004 dollar and April dollar closed at 15.50/16.50 paise (12/13 paise and 15/16 paise) respectively.
FORECAST: Premiums seen falling on Thursday.

Gilts
The government securities prices gained by 15-45 paise, even as the RBI official had ruled out a repo rate cut for now. Opening at lower levels levels, the G-Secs continued their northward journey to surge above the Tuesdays levels towards the closing time. Referring to RBI deputy governors comment that the repo rate would not be cut, a dealer said The case for repo cut is getting strengthened by the day backed by the rupee spiral. The cut in repo rate seems not far away, a dealer said. The benchmark 10-year 9.81% paper closed at 129.94 (129.68). The 11.40% 2008 shorter maturity paper closed at 127.55 (127.10). The 7.40% 2012 bond closed at 111.15 (110.94). The 8.07% 2017 bond closed at 118.83 (118.54). The 8.35% 2022 paper closed at 123.32 (123.10). On the NSEs WDM, volumes of Rs 5,679 crore were reported, despite strike.
FORECAST: Prices seen rising on Thursday.

Compiled by BSS Reddy