The repo rate cut -- effective Monday -- was expected to push up the gilts prices. However, it failed to jack up the government securities prices as the forex market was gripped by high volatility, dealers in the debt market said. "The yields have gone up," a chief money market dealer in a private bank said.

Initially, the prices in the government securities market moved up by 40 to 60 paise across the board as bullishness returned due to the repo rate cut.

No sooner that the market realised that new funds have not been injected through a repo rate cut bearishness returned in the afternoon. The prices dipped sharply by 40-60 paise thus bringing it back to the original opening level.

Secondary market dealers said: "the reduction in the repo rate affected the governmentsecurities trading as the securities across all maturities witnessed upward trend in the morning. However, it came down to the opening level in the afternoon as the market was uncertain about interest rate movement".

Market dealers maintained that the prices initially moved up in the morning by 40-60 paise as expected due to the general market sentiment prevailing in the morning. At the time when the price was ruling high, most buyers sold their securities and booked profit. According to market sources, uncertainty in the forex market resulted in a fall in the government securities prices which later went up as traders were not able to take any view on the interest rate movement.

"In the morning buying pressure was felt in the securities market. However, in the late afternoon, buyers were keeping away from the government securities market and even sellers were holding on to their securities," said a dealer from a nationalised bank. The most traded securities on Monday were short-dated securities like zerocoupon 2000 government loan, 13.65 per cent government security maturing in 1999.

The wholesale debt market of NSE witnessed trading worth Rs 469.97 crore. The 13.65 per cent government loan maturing in 1999 was traded for Rs 40 crore at a weighted yield of 9.59 per cent.

The zero coupon government bond maturing in 2000 was traded for Rs 70 crore at a weighted yield of 10.97 per cent. The 11.75 per cent government stock maturing in 2001 was traded for Rs 25 crore at a weighted yield of 11.23 per cent.