MUMBAI, July 17: The massive liquidity overhang in the system led to record trading in the wholesale debt market of the National Stock Exchange on Thursday with turnover touching Rs 1,553.58 crore.

This is the highest turnover recorded in the segment since it came into being in September 1994.

Leading the bull rally was the 11.83 per cent gilt maturing in 2003 - auctioned on Wednesday amid record oversubscription. The security which was auctioned at par saw 26 deals worth Rs 650 crore being struck at 11.56 per cent yields.

The six-year paper which was traded at Rs 101 on Wednesday at the post-auction trading session reached Rs 101.30 on frenzied trading on Thursday. The total deals struck in this security aggregated Rs 650 crore - the highest turnover that a single security has ever clocked.

Call rates reached 4 per cent during the morning session of trade due to highly oversubscribed six-year paper and the 364-day treasury bill which sucked Rs 4,130 crore out of the system on Wednesday. "However, calls came down to settle at 1-1.5 per cent levels on account of increased liquidity.

The outflow of Rs 4,130 crore did not have much of an impact on the market except for a slight rise in the morning session," a dealer said.

The six-year paper, auctioned on Wednesday, drew bids worth Rs 13,044.62 crore against a notified amount of Rs 3,000 crore. This is one of the highest oversubscriptions that a single auction of government security has ever drawn. The apex bank was forced to set a cut-off yield of 11.83 per cent which was much lower than what the market expected.

The six-year security, apart from other papers which were traded on Thursday, included the 12.59 per cent central government security maturing in 2004. It witnessed 62 deals worth Rs 370 crore with yields pegged at 11.76 per level.

The 13.85 per cent gilt maturing in 2001 was traded for Rs 30 core at 10.84 per cent yields while the 12 per cent gilt maturing in 1999 was dealt at 9.16 per cent yields for Rs 35 crore. Not to be left behind, the zero coupon security maturing in 1999 witnessed trades to the tune of Rs 40 crore struck at Rs 87.95. "Zero coupons are the ones which are the most traded in a volatile market," a dealer commented.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.