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FE NEWS SERVICE
GiltsThe government securities market witnessed dull trades on Thursday. Gilt prices fell by 3-4 paise at the shorter end compared with their previous closes. A small quantum of trade was seen in the zero coupon 2000 and 11.55 per cent 2001 papers, dealers said.
"Some selling pressure was seen in short-term gilts. At the longer end, a few provident funds bought the 10-year paper at 12.15 per cent," said a dealer from a private bank. The announcement of the Rs 4,000 crore six- and 10-year papers auction on Wednesday caused confusion in the market as it had expected short- and medium-term papers. The market expects the cut-off yield on the six-year paper at 12 per cent and the 10-year paper at 12.30 per cent.
At the short and medium end, the 11.55 per cent 2001 paper traded at Rs 100.03 (Rs 100.10) and the 11.78 per cent 2003 paper at Rs 100.03 (Rs 100.04). The zero coupon 2000 paper quoted at Rs 81 (Rs 81.90). The wholesale debt market of the NSE witnessed trades worth Rs 190.16 crore.
FORECAST: Gilt prices are expected to rule at Thursday's level on Friday.
Call Money
The call money rates remained stable on Thursday. The overnight rates opened at 9.25-9.30 per cent compared with their previous close of 9.50 per cent. The rates tightened marginally to 9.30-9.40 per cent in the afternoon and finally settled at the opening level of 9.25 per cent towards the close.
Traditional lenders were absent from the market to keep the call rates at a band higher than the Reserve Bank of India's fixed repo rate, dealers said. The RBI received only two applications for its three-day 8 per cent fixed-rate repos and accepted both of them, mopping up Rs 5,015 crore. The maturing three-day repos infused Rs 5,320 crore into the system, a dealer said.
The Security Trading Corporation of India's (STCI) weighted average rate was 9.06 per cent on a turnover of Rs 1,200 crore.
FORECAST: The call rates are seen in the 9-9.50 per cent band on Friday.
Spot Dollar
The forex market was thin and listless on Thursday. The rupee opened at 42.51/52 against the dollar, marginally lower than its previous close of 42.52/53. A sudden spurt in corporate demand and anticipation that the State Bank of India would enter the market to buy dollars on behalf of its public sector clients weakened the rupee to 42.55/56 in the afternoon. Contrary to market expectations, the State Bank of India sold a small quantum of dollars which saw the rupee appreciate towards the close to 42.51/52.
"Despite corporate demand, the rupee moved in a narrow range as importers were not willing to cover at that level," forex dealers said.
FORECAST: The rupee is seen between 42.52 and 42.55 on Friday.
Forwards Premium
Forward premiums across all maturities fell on Thursday compared with their previous closes. Long-term premiums fell by 20-25 paise and near-term premiums by 10 paise.
The six-month annualised premium quoted at 9.63 per cent, one month (annualised) at 10 per cent and three month (annualised) at 8.93 per cent. The September premium closed at 22/24 paise, October at 55/60 paise, November at 86/91 paise, December at 117/122 paise, January at 152/157 paise, March at 227/232 paise, April at 266/271 paise, July at 376/381 paise and August at 411/418 paise.
"The fall in forward premiums is due to a stable rupee and easy liquidity in the system. The fact that exporters are receiving interest on premiums is keeping them down," said a dealer from a foreign bank.
FORWARD: The six-month annualised forward premium is seen at 9.60-9.65 per cent on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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