Market Round Up

Updated: Sep 25 2003, 05:30am hrs
Call Money
Call rates eased in late trades after ruling close to 5% in the morning. Call rates closed at 4.00-4.25%. There was high demand for funds in the light of outflows towards the advanced tax payments. The rates were seen around 4.80-4.95% in the early trades, before IFCI coming into the picture and lending at 4.50%. The tightness in the overnight market was due to the fact that end-September is a bank holiday. Then there is October 2 and maturing $5.5 billion Resurgent India Bonds (RIB), a dealer said. But the demand for funds eased later in the day with the RBI accepting partial 22 repo bids for Rs 16,372 crore. The RBI received 22 bids worth Rs 21,825 crore. After the repo auction, a few deals were also seen as low as 3.50%. Meanwhile, the National Stock Exchange (NSE) pegged its overnight Mibid and Mibor at 4.57% and 4.70% respectively.
FORECAST: Call rates seen above 4.50% on Thursday.

Spot Dollar
The rupee closed a tad lower against the dollar at 45.8050/8150 as compared with Tuesdays close of 45.7725/7775. This is the second straight day that the rupee closed lower, although foreign direct investment investment inflows helped the rupee to recover from its intra-day low of 45.86. The rupee opened the day at 45.80/81 and came under pressure in the early trades. There was higher demand for dollars after a few cancellations of near forward contracts by exporters.There was also dollar covering ahead of the month-end at a comfortable level, a dealer said. But the rupee recovered later with a foreign bank selling dollars in the market, dealers said. The intra-day high was seen at 45.78. Meanwhile, the Reserve Bank of India ( RBI) fixed its reference rate for the dollar at 45.84 as against Tuesdays fix of 45.75.
FORECAST: The rupee seen rangebound on Thursday.

Forward Premiums
Forward premium tracked the slip in the spot-rupee and inched up on fresh paying interest. Both the six-month and one-year annualised premiums closed higher at 0.99% (0.94%) and 1.10% (1.04%) respectively. There was higher demand for spot dollars after a few cancellations of near forward contracts by exporters. This also pushed the premiums at the forward segment of the market. The pressure on the spot-rupee saw a few exporters holding back while importers came into cover month-end payables, a dealer said. The benchmark six-month dollar premium, payable at end-February, closed at 18/20 paise. In month-wise premiums, the September dollar closed at 1.125/2.25 paise while in the far forwards, the July 2004 dollar closed at 41/43 paise with the August 2004 dollar closing at 46/48 paise. The market seems to be still a tad wary of the upcoming redemption of the $5.5 billion RIBs even though the central bank has said that all will be fine.
FORECAST: Premiums seen steady on Thursday.

Gilts
The rumour that the Centre would reduce its market borrowing amount led to a rally in the government security prices on Wednesday. Prices rose by around 30-40 paise on fresh buying interest. The current market favourite 7.27% 2013 paper closed with a yield of 5.27% compared to its previous close of 5.3069%. The profit booking pressure ahead of the half-yearly closure eased a bit and market players were seen taking fresh positions ahead of the October monetary and credit policy. This is on anticipation that the RBI would reduce the Bank Rate in the credit policy. Though the market sentiment improved from what it was in the last week, there was still concerns over the liquidity impact of RIB redemptions, despite central bank indications to the contrary, a treasury head in a state-owned bank said. On the NSEs wholesale debt segment, trades worth Rs 3,392.87 crore were seen.
FORECAST: Prices seen inching up on Thursday.

Compiled by Atmadip Ray