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Market round-up
Call money
Call rates moved in a narrow band on Monday. Opening the day at 8.50-8.75%, a shade lower from its Saturday'sclose of 8.50-9.00%, call rates were rangebound on ample liquidity and poor demand for funds. "There is enough liquidity sloshing around. Coupon payments, bond redemptions and interest due on cash reserve ratio will take gross inflows to Rs 14,724 crore during the month", the treasury head of a European bank said. Inflows of Rs 631.59 crore were seen today with coupon-payment on the 12.30% 2016. "Unless there is a bond auction, the call market will remain dull. There are no market moving factors as of now, but we expect an auction soon", a money market analyst said. At the RBI's repos auction under its LAF, three bids for Rs 120 crore were received. RBI rejected all bids. At close, call rates were seen at 7.50-8%. Most of the deals were struck at 7.50-8 per cent.
FORECAST: Call rates seen at around 9-8.50% levels on Tuesday.Spot dollar
The rupee held rock steady against the US dollar on Monday. Opening the day at 44.67/6750 from its Friday's close at 44.665/675, the rupee moved in a fine band on poor demand for dollars. "It is the early part of the month... dollar demand is poor. Most of the trades today were inter-bank", a dealer with a forex brokerage said, adding: "Movement was restricted to a very narrow range of one paise till noon on slack corporates dollar demand. At mid-session, the rupee quoted at 44.67/6750, unchanged from the Friday's close". At close, the rupee was seen at 44.7625/6775. Cash/tom quoted at 0/0.25 paise, cash/spot at 0.25/0.75 paise with tom/spot also at 0.25/0.75 paise. The Reserve Bank of India (RBI) fixed its reference rate for the US dollar at 4.67 as against its previous rate of 44.68.
FORECAST: The rupee seen steady on Tuesday. Forward premiums
Forward premiums hardly moved on Monday. The six-month annualised forward premium ended at an annualised 3.25 per cent as compared to 3.40 per cent on Friday. "There is hardly any interest for forward dollars given a firm spot rupee, and steady call money rates", the treasury-head of a leading European bank said. July dollars ended at 10/11 paise (12/13 paise), August at 23/24 paise (24/25 paise), while in the far-end, January closed at 82/83 paise (81/83 paise) with February at 93/95 paise (93/94 paise). "The money market is waiting for news on the auction front... that will drive up call money rates. But as of now, it is a dull market with little paying or receiving interest", a dealer with a forex brokerage said.
FORECAST: Premiums seen range-bound on Tuesday. Gilts
Medium-term bond prices on Monday rose by 10 paise before reversing gains at close of trades. Coupon payments of Rs 631.59 crore were seen today with coupon-payment on the 12.30% 2016. Net-inflows totalled Rs 1,400 crore. "Gilts at the medium-end rallied by 10 paise in morning trades before reversing all the gains due to auction expectations... and zero-refinance under liquidity adjustment facility (LAF) to close flat", I-Sec said in a report. Bond prices had rose on Friday in evening deals on news of a cut in the EPF rate by the Central government. The 11.90 per cent 2007 was seen at Rs 106.10-106.20; 12% 2008 at Rs 106.25-106.55 with the 11.99% 2009 at Rs 106.05-106.20. "Auction news is what we are looking out for... there will be some action after that", a dealer with a private-owned bank said. The Central Goverment has targeted a gross borrowing programme of Rs 1,17,000 crore for the current fiscal.
FORECAST: Bond prices seen holding current levels on Tuesday.
-- (Compiled by Raghu Mohan) Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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