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Gilts
The government securities market on Thursday witnessed selling pressure from most private sector and nationalised banks for short-dated gilts and the two new loans. "The market reacted marginally to the new Reserve Bank of India price list, indicating a much lower price than the secondary market in order to align the yield curve," sources said. Prices of short-dated gilts fell by 1-2 paise.
The wholesale debt market of the NSE witnessed increased activity with trades worth Rs 524.15 crore. The zero coupon government bond maturing in 1999 was traded worth Rs 130 crore at a weighted yield of 10.68 per cent. The 11.75 per cent paper maturing in 2001 was traded worth Rs 55 crore at a weighted yield of 11.58 per cent.
FORECAST: Short-term gilt prices are expected to fall by 2-3 paise on Friday.
Call Money
The overnight rates opened at 9 per cent on Thursday compared with their previous close of 9.10-9.25 per cent. "During the day, the call rates eased to 8.80-8.90 per centowing to lowered corporate demand for funds," dealers said. However, the rates tightened to 9.25-30 per cent during the afternoon on borrowing by a few banks. The rates tightened further to 9.50 per cent at the close on renewed spurt in demand. The total outflow through the 8 per cent fixed-rate repos was Rs 1,000 crore while Rs 5,065 crore entered the system through repo reversal.
Most banks did not take positions as Friday is the reporting day, sources said.
The Security Trading Corporation of India's turnover was Rs 1,200 crore on a weighted average rate of 8.92 per cent.
FORECAST: The call rates are seen in the 7-8 per cent band on Friday.
Spot Dollar
The spot rupee strengthened to 42.45/48 against the dollar on Thursday. The Indian currency opened at 42.54/55 compared with its previous close of 42.53/55. The rupee remained stable at 42.52/53 throughout the morning. However, in the afternoon, the rupee appreciated sharply as State Bank of India was seen selling dollars at42.51/52, much below the ``support level,'' to finally close at 42.45/48. "After the rupee appreciated to 42.51/52, most banks sold to come out of their long positions, which saw the rupee appreciate," dealers said.
FORECAST: The rupee is seen between 42.45 and 42.55 on Friday.
Forwards Premium
The near-term forward premiums fell by 1-2 paise while the far-end ones fell by 4-7 paise on Thursday owing to dollar-selling by banks and corporates. After the rupee appreciated to 42.45/48, premiums dipped further. The six-month annualised premium closed at 8.30 per cent (8.67 per cent), three months at 7.6 per cent (8.42 per cent) and one month at 7.58 per cent (7.58 per cent). The September premium closed at 12/14 paise (14/17 paise), October at 40/43 paise (44/47 paise), November at 70/75 paise (75/78 paise), December at 98/102 paise (106/111 paise), January at 130/135 paise (139/144 paise), February at 161/166 paise (169/174 paise), March at 194/199 paise (205/210 paise), April at 230/235paise (241/247 paise), May at 263/268 paise (276/281 paise), June at 297/302 paise (315/321 paise), July at 331/336 paise (344/350 paise) and August at 265/272 paise (378/386 paise).
FORECAST: The six-month annualised forward premium is seen at 8.30-8.35 per cent on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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