Call money
Call rates quoted higher on Wednesday on heavy demand for funds, BUT comfortable liquidity saw call rates rule rangebound. Opening the day at 8.25-8.50 per cent from its previous close at 8-8.20 per cent , call rates held these levels as there was heavy demand for funds in the early morning trades. "Call rates opened higher as there was heavy demand for funds from banks to cover there positions ahead of reporting Friday which is only two days away", a dealer said. Call rates eased a shade after the initial demand was met and was quoted lower at 8.20-8.30 per cent in post-noon trades. At close call rates were seen at 8.30-8.40%. The Reserve Bank of India (RBI) accepted one application worth Rs 700 crore at its one-day repos. The National Stock Exchange pegged its overnight Mibid and Mibor at 8.15% (8.10 per cent) and 8.29 per cent (8.26 per cent) respectively.FORECAST: Call rates seen holding current levels on Thursday.
Spot dollar
The rupee held steady against the dollar on Wednesday. Opening the day at 46.86/87, almost same from its previous close at 46.85/87, the rupee remained rangebound as the market witnessed less demand for the dollars along with adequate supply from state-run banks and some corporates.
"The rupee rallied against the greenback as the money market witnessed less demand for dollars as the month-end demand for dollars was met. The rupee gained by thirteen paise against the greenback and was quoted at 46.74/76 at end of trades", a dealer said, adding: "Off-loading of dollars by state-run banks in late-noon trades further strengthened the rupee". At close, the rupee quoted at 46.74/76. The Reserve Bank of India pegged its reference rate for the dollar at 46.79 (46.80). Cash/spot was quoted at 0.52/0.60 paise with cash/tom and tom/spot both at 0.25/0.30 paise apiece.
FORECAST: Rupee seen rangebound on Thursday.
Forward premiums
Forward premiums quoted a shade higher on Wednesday. The six-month annualised forward premium was quoted at 4.15% (4.10%) with one-year annualised premium at 4.45% (4.20%). "Forward premiums quoted higher despite strengthening of the rupee against the greenback. Forward premiums tracked the market... higher call rates in early trades and fear of possible tightening of liquidity is the reason for initial forward premia quotes", a dealer said. The rupee opened steady against the dollar as month-end demand for dollars was met. The market witnessed less demand for dollars with ample dollar-liquidity after state-run banks off-loaded there long-dollar positions. Call rates quoted higher at 8.30-8.50% as there was heavy demand for funds ahead of reporting Friday. November dollars quoted at 12/13 paise while in far forwards April quoted at 96/97 paise (93/95 paise) with May at 110/112 paise (108/110 paise).
FORECAST: Premiums may soften in intra-day trades on Thursday.
Gilts
Bonds prices quoted a shade higher on Wednesday. The 11.40% 2008 was traded at Rs 100.14 (Rs 100.10) with 12.50% 2004 at Rs 105.18 (105.15). Call rates opened at higher level due in early trades due to heavy demand for funds ahead of reporting Friday, but money market witnessed ample liquidity to meet the demand and this saw call rates rangebound. Adequate liquidity in the money market has also resulted in improvement in bond prices. Further, the rupee performed well against the dollar and quoted higher amid less demand and adequate liquidity in the money market. On the NSE wholesale debt segment, trades worth Rs 1,297.47 crore was recorded. Deals worth Rs 305 was seen in 11.40% 2008 at a weighted average yield of 11.37% while those in the 11.30% 2010 trades worth Rs195 crore was recorded.
FORECAST: Bond prices will see an up-tick on Thursday.
(Compiled by George Glace)
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