Market Round Up
Call MoneyCall rates moved in a narrow range on Monday on good liquidity and reduced demand. Call rates opened between 7.25-7.50 per cent. It stood at the level for most of the morning session. In the afternoon, it moved down slightly and closed around 7.00-7.25 per cent, said dealers. The majority of the trades was done around 7.5 per cent. The Mumbai Interbank Overnight Average rate, a weighted-average of traded rates from 16 banks and Financial institutions, was 7.46 per cent. "Rates have eased from last week as some big lenders are back in the market," said a dealer at a state-run bank. The rates are expected to hover in the same region throughout the week. The failure of the capital-indexed bonds to mop up no more than Rs 500 crore will also sustain the current excess liquidity condition. Forecast: Call rates to open in the range of 7.25 to 7.75 per cent.Spot Dollar The rupee closed weaker after opening at 39.17/20 against the greenback compared with the last week close at
39.15/17. The currency was seen weaker around 39.20/22 shortly after start of trade. "There was a good demand for dollars today. The market was more active compared with trades in the last couple of days last week," a dealer with a European Bank said. Inter-bank sources said the rupee traded in the 39.15-39.25 band. Dealers said State Bank of India bought dollars for its corporate clients early in the day. "Laterday demand for the greenback was largely due to squaring up by banks", said a dealer with a brokerage. The dollar's high was Rs 39.26 while its low was 39.19. At close, the rupee was quoted weaker at 39.20/23.Meanwhile, the Reserve Bank fixed its reference rate for the dollar at Rs 39.21 compared with its weekend's fix at Rs 39.24. Forecast: Rupee seen in the 39.18-39.25 band on Tuesday in active two-way trades. Forward Premia The RBI intervened in the forwards through heavy buy/sell swaps for March and April maturities. Forward quotes across all maturities fell by around 10 paise and
was steep for March, April and October premiums. March dollars opened at 106/105 paise, went stronger at 87/91 paise and closed at 88/93 paise. April quotes opened at 139/136 paise and later went stronger at 120/121 paise. The sixth month's annualised forward cover went at 8.66 per cent."At one point, April dollars strengthened to 118/120 paise though at close it was quoted at 119/121 paise," said a dealer in a corporate bank.Long-term forward cover also fell. October dollars opened at 300/310 paise, went pink at 288/292 paise and finally closed at 294/299 paise.Dealers could not estimate the RBI's intervention . "It's difficult to say...but it could have been substantial as the premiums fell by quite a bit,". Forecast: Six-month annualised cover seen in 8.55-8.60 per cent band on Tuesday Gilts The wholesale debt-market segment of the National Stock Exchange was mostly a sellers market on Monday. "The market was down throughout the day with a lot of sellers coming in," said a dealer with a
private-sector bank. "With calls remaining at easy levels, there was no volatility in the debt market today", said a dealer with a public-sector bank. Calls remained below 8 per cent during the day. The debt-market segment witnessed trades worth Rs 134.07 crore on Monday. The most actively traded securities were the 10.85 per cent 2001 government loan which saw trades worth Rs 20 crore and the 11.83 per cent 2001 government loan which was traded for Rs 15 crore. The 364-day treasury bill, maturing on December 18, was traded for Rs 19 crore at a weighted yield of 8.60 per cent, while the total debentures traded during the day stood at Rs 9.5 crore. FORECAST:Securities prices are seen ruling at same levels on Tuesday.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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