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Call Money
The overnight rates opened at 6.00-6.25 per cent on Tuesday, higher than their previous close of 5.75 per cent. Throughout the morning, the rates quoted at the opening level. However, in the afternoon the rates tightened to finally close at 6.75-7.00 per cent.
There is little liquidity in the system as the total outflow on Tuesday was to the tune of Rs 10 crore through the Reserve Bank of India three-day 5 per cent fixed-rate repos, dealers said. The central bank received only one application and accepted it. On Monday, Rs 4,107 crore had gone out of the system through the three-day repos. The call money market is not showing a healthy trend as liquidity is confined in the hands of only a few, dealers said.
The Securities Trading Corporation of India's turnover was Rs 2,200 crore on a weighted average of 6.18 per cent.
FORECAST: The call money rates are expected to hover around 7-7.50 per cent on Wednesday.
Spot Dollar
Dull trades continued to swamp the forex marketon Tuesday. The local currency opened at 42.55/57, lower than its previous close of 42.52/54. In later trades, the rupee gained to an intra-day high of 42.53, but soon weakened and closed at its opening level.
"Corporate demand for the greenback continues to be lacklustre," dealers said.
Cash/tom quoted at 0/0.25 paise, unchanged from its previous close, and cash/spot at 0/0.50 paise (0.25/0.50 paise). "There is no bunching together of greenback demand, unlike month-end periods...most of it has been well spread out," dealers said.
Elsewhere, the Reserve Bank of India fixed its reference rate for the dollar at 42.56, unchanged from its previous fix.
FORECAST: The rupee is seen in the 42.52-42.60 band on Wednesday.
Forward Premiums
Long forwards dipped by 5 paise to 10 paise with the State Bank of India receiving actively. "There was little paying pressure with most corporates having covered up to August," dealers said.
February premiums ended at 185/188 paise (190/195 paise), March Call Money
The overnight rates opened at 6.00-6.25 per cent on Tuesday, higher than their previous close of 5.75 per cent. Throughout the morning, the rates quoted at the opening level. However, in the afternoon the rates tightened to finally close at 6.75-7.00 per cent.
There is little liquidity in the system as the total outflow on Tuesday was to the tune of Rs 10 crore through the Reserve Bank of India three-day 5 per cent fixed-rate repos, dealers said. The central bank received only one application and accepted it. On Monday, Rs 4,107 crore had gone out of the system through the three-day repos. The call money market is not showing a healthy trend as liquidity is confined in the hands of only a few, dealers said.
The Securities Trading Corporation of India's turnover was Rs 2,200 crore on a weighted average of 6.18 per cent.
FORECAST: The call money rates are expected to hover around 7-7.50 per cent on Wednesday.
Spot Dollar
Dull trades continued to swamp the forex marketon Tuesday. The local currency opened at 42.55/57, lower than its previous close of 42.52/54. In later trades, the rupee gained to an intra-day high of 42.53, but soon weakened and closed at its opening level.
"Corporate demand for the greenback continues to be lacklustre," dealers said.
Cash/tom quoted at 0/0.25 paise, unchanged from its previous close, and cash/spot at 0/0.50 paise (0.25/0.50 paise). "There is no bunching together of greenback demand, unlike month-end periods...most of it has been well spread out," dealers said.
Elsewhere, the Reserve Bank of India fixed its reference rate for the dollar at 42.56, unchanged from its previous fix.
FORECAST: The rupee is seen in the 42.52-42.60 band on Wednesday.
Forward Premiums
Long forwards dipped by 5 paise to 10 paise with the State Bank of India receiving actively. "There was little paying pressure with most corporates having covered up to August," dealers said.
February premiums ended at 185/188 paise (190/195 paise), Marchat 221/224 paise (228/233 paise) and April at 255/258 paise (262/268 paise).
"State Bank was seen receiving in the long forwards...this helped long forwards go lower despite higher call rates at 6.25 per cent until noon," dealers said.
The six-month annualised forward cover closed at 7.30 per cent compared with its previous close of 7.53 per cent, and the one-year one at 8.43 per cent (8.63 per cent).
FORECAST: The six-month annualised forward cover is seen at 7.30-7.40 per cent on Wednesday.
Gilts
The government securities market witnessed buying interest in the two-year 2000 security on Tuesday as it expects a two-year paper auction by the end of this month.
The market expects a government auction by the weekend owing to huge inflow into the system on July 31, dealers said. "More than Rs 2,000 crore is expected to flow into the system during this week as the 13.62 per cent 1998 paper will mature on July 31. The redemption of the 364-day treasury bills and the coupon payment of thestate development loan maturing this week will result in huge cash inflow," said a dealer.
The market saw trades in the zero coupon 2000 security and the 11.64 per cent 2000 government loan. The wholesale debt market of the NSE witnessed trading worth Rs 341.78 crore. The 11.55 per cent 2001 government loan was traded worth Rs 50 crore at a weighted yield of 11.49 per cent.
FORECAST: Government security prices are expected to remain at Tuesday's levels on Wednesday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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