Market Round Up

Updated: Sep 20 2003, 05:30am hrs
Call Money
Call rates eased towards the fag end of the reporting Friday with little demand for funds. The rates closed at 4-4.25% as compared with the overnight level of 4.45-4.60%. There was, however, early demand for funds on the reporting day. Banks which were uncovered rushed to mop up funds from the inter-bank system, pushing the rates up to 4.60-4.65%. Call rates opened at 4.0-4.50% and was under slight pressure in the morning. The advanced tax outflows to the tune of Rs 8,000-10,000 crore also put pressure on call rates. But, after the RBIs repos auction, which saw the central bank mopping up a modest Rs 9,040 crore, call rates eased to close at 4-4.25% level. The RBI accepted 25 bids for the repos amount at its three-day repos auction. Meanwhile, the NSE pegged its overnight Mibid and Mibor at 4.41% and 4.54% respectively.
FORECAST: Call rates seen between 4.40-4.50% on Saturday

Spot Dollar
The rupee closed four paise stronger against the dollar at 45.9350/9450 on the back of the Reserve Bank of Indias (RBI) statement that redemption of the Resurgent India Bonds (RIB) will not have much impact in the forex market. Opening at 45.90/93, the rupee stayed in a relatively narrow band between 45.92 and 45.94 during the day on moderate corporate dollar demand. Hectic dollar interest of the last couple of days on fears of short-dollar supplies on account of the RIB redemption seems to have ebbed. The RBI reportedly sold $200-300 million on Thursday to support the rupee which tasted 46.08 in in tra-day trades. The recovery in the domestic stock markets and continued foreign fund investment despite the recent volatility, also improved sentiment. Meanwhile, RBI today fixed the reference rate for the dollar at 45.93, 15 paise lower than Thursdays fix of 46.08.
FORECAST: The rupee seen holding current levels on Monday

Forward Premiums
Forward premiums took comfort from the spot-rupees recovery and fell across-the-board on fresh receiving interest. The six-month annualised premium closed lower at 1.13% as compared to 1.24% on Thursday. The market seems confident of the fact that the Reserve Bank of India (RBI) will step in if there is huge volatility. Thursday showed that the central bank will step in, a dealer with forex brokerage said, adding: However, there are still huge short-dollar positions in the market. Cash/spot and cash/tom premiums closed at 1.75/1.85 paise and 1.40/1.45 paise respectively. September dollars closed at 2.25/3.25 paise, October 3/5 paise, November 8/10 paise, December 13/15 paise, January 17/9 paise and February 22/4 paise. Foreign funds have pumped in about $2.8 billion into the bourses till date in 2003 as against $740 million in 2002. They pumped in a net $107.6 million on Tuesday and Wednesday.
FORECAST: Premiums seen inching up on Monday.

Gilts
Government security prices fell a tad after the Reserve Bank of Indias (RBI) update the redemption of the $5.5 billion Resurgent India Bonds (RIB) will not affect liquidity. The benchmark 10-year 7.27% 2013 closed at 5.3038% below Thursdays 5.3101%. Sentiment was better today. Even corporate yields showed that trend, a dealer with a primary dealership said. The Power Finance Corporations 5.85% 2008 quoted unchanged at 5.76%, while the Housing Development Finance Corporations 5.82% 2008 bond was seen at largely unmoved from its overnight 5.795%. On the National Stock Exchanges wholesale debt segment, trades worth Rs 4,217.23 crore were seen. Trades worth Rs 485 crore were seen at the 6.05% 2019 paper, while the 7.46% 2017 and 7.49% 2017 papers amounted to Rs 370 crore and Rs 365 crore respectively.
FORECAST: Bond prices seen rangebound on Saturday

Compiled by Raghu Mohan