Market Round Up

Updated: Nov 8 2003, 05:30am hrs
Call Money
Call rates ended Friday at around 4.40-4.50%, a tad higher from its previous close. Opening the day at 4.40-4.50%, call rates were extremely rangebound in dull trades. The auction of the Rs 5,000 crore floating rate bond (2012) did not affect liquidity at all, a dealer with a primary dealership said. The Reserve Bank of India (RBI) received 85 bids for Rs 10,930 crore and it accepted 29 bids for Rs 4,991 crore. The RBI mopped up Rs 15,000 crore at the three-day repos auction today at the cut-off price of 4.50% under the liquidity adjustment facility. Despite the auction, there was good enough liquidity and this is evident from the repos auction numbers, a dealer with a private-owned bank said. The National Stock Exchange (NSE) pegged its overnight Mibid and Mibor rates unchanged at 4.40% and 4.50% respectively.
FORECAST: Call rates seen at current levels on Saturday.

Spot Dollar
The rupee closed at a one-month against the dollar at 45.26/27 today, gaining four paise from previous close on strong trade and capital dollar inflows, even as state-run banks absorbed parts of the dollar supplies. Opening the day at 45.30/31, the rupee hovered around the 45.30 level till noon, amid robust dollar supplies by exporters and foreign funds and intervention by state-run banks at lower levels. In early trades, the rupee rallied against the dollar on fresh exporter sales and steady foreign inflows, but otherwise, the market was quiet and trades range-bound trade, a dealer with a forex brokerage said. Towards close, the rupee rose with state-run banks staying away from buying dollars to end at 45.26/27. The rupee has appreciated by around 6% against the dollar since January 1. Foreign funds have pumped about $4.5 billion into the local bourses domestic since January 1. The RBI maintained its reference rate for the dollar at 45.29.
FORECAST: Rupee seen at 45.30 levels on Monday.

Forward Premiums
Forward premiums rose sharply as banks did sell-buy swaps to take advantage of ample dollar supplies and hold higher yielding rupees. Near forwards gained 2-5 paise while far forward premium moved up by 7-15 paise. Despite a four-paise appreciation in the spot-rupee, the sixth month annualised forward cover rose to 0.81% as compared to its overnight finish at 0.50%. Cash/spot and cash/tom premiums closed at 0.75/1.25 paise and 0.50/0.80 paise respectively. The month-wise premium in paise were: November 1/2, December 4/5, January 7/8, February 9/10, March 13/14 and April 17/19. Unabated dollar supplies from overseas funds and domestic exporters continue to hit the market, but there lack of direction from the overseas markets where the dollar stayed stable ahead of the US employment report. This prompted importers to stay off the market, a dealer said. Dollar inflows are seen continuing despite RBIs move to cap NRE deposit rates at 25 basis points over Libor.
FORECAST: Forward seen at current levels on Monday.

Gilts
Government security prices fell despite easy call rates by 15-20 paise in the medium to longer term, inspite of mild buying on dips towards close. The benchmark 7.27% 2013 ended at Rs 116.80/85, down by around 14 paise with the yield rising to 5.08% from its overnight 5.07%. The 9.81% 2013 lost 13 paise at Rs 135.32/34 with the yield moving up to 5.10% (5.08%). The actively traded 8.07% 2017 was quoted around Rs 124.65/70 in late trades and the 7.46% 2017 at Rs 119.60/65 (Rs 120.00). The 7.40% 2013 paper closed at Rs 116.00/05 (Rs 116.25/30). Meanwhile, the central bank said that the annual coupon on the floating rate bond (2012) auctioned today will be at a spread of nine basis points over a variable base, to be reset every year.
FORECAST: Prices seen gaining on Saturday.

Compiled by Raghu Mohan