Prices in the government securities market moved up by 15-20 paise. The wholesale debt market of the NSE witnessed trades worth Rs 437.97 crore. The 11.10 per cent government loan maturing in 2003 was traded for Rs 75 crore at a weighted yield of 11.09 per cent. The 11 per cent government loan maturing in 2002 was traded for Rs 50 crore at a weighted yield of 10.93 per cent.

According to market dealers, public sector banks were busy buying medium- and long-term securities from the market as they had booked profits by selling off their securities portfolio in the last week of March. "Most of these banks with ample funds were seen deploying them in securities as they expect the yields to go up," a dealer from a nationalised bank said.

The list of PSU banksseen making enquiries in the market included State Bank, Bank of India, Union Bank of India, Bank of Baroda, Dena Bank and Central Bank.

Meanwhile, almost all the foreign and private sector banks were seen selling short-, medium- and long-dated securities in the market. The banks in the market included HongkongBank, Standard Chartered Bank, American Express Bank among others, and a few private banks, dealers said.

Most foreign and private banks, which actively trade in government securities throughout the yeark, bought government securities at a very low yield in September-October last year on the assumption that it would go up later. "They continued investments in government securities, but were not able to offload them when the yields were quite high. Most banks were seen off-loading securities in the last two weeks of March at a much lower yield thereby booking losses," a dealer from a private bank said. "As they are required to provide for depreciation in their account books, they are cash starvedand are currently selling securities," another dealer said.

According to dealers, most banks were seen buying and selling high coupon securities including 13.05 per cent coupon maturing in 2007, 14 per cent coupon maturing in 2006 and a new security maturing in 2003.

Most PSU banks off-loaded securities after the central bank announced various measures to ease speculative pressure on the rupee in mid-January.