Call money
Call rates opened on Tuesday at a higher level at 10.25-10.75 up from yesterday's close of 9.75-10.0 per cent due to demand for funds. "There were some demand for funds in the early trading hours mainly on account of outflow due to 11.99 per cent 3000 crore auction. However the central bank's reverse repo auction at 10 per cent helped call rate to come down at 10 per cent level," said a dealer. Stray deals were reportedly struck at 11% levels. The Reserve Bank of India conducted a reverse repo at 10 per cent, which infused around Rs 3300 crore into the system. The inflows from the India Millennium Deposit issue of around $5.2 billion is likely to cool off call rates during the rest of the week. The National Stock Exchange pegged its overnight Mibid and Mibor at 10.52% (9.94%) and 10.78% (10.18%) respectively.FORECAST: Call rate to dip tomorrow.
Spot dollar
Opening the day at 46.61/63, the rupee weakened slightly from its previous close, mainly on account of a demand supply mismatch. "The morning trade saw some dollar demand by players which saw rupee touching an intra-day low of 46.67/68 against the greenback," said a dealer. Later, dollar sales from exporters helped rupee to gain by two paise before closing at 46.65/66. The rupee is expected to strengthen further as State Bank of India's `India Millennium Deposit', has a promising mop up of around $5.2 billion. At close, the rupee was quoted at 46.65/66. According to dealers, the deposits from India Millennium Deposit (IMD) can render support to rupee for the next couple of months. The Rerserve Bank of India pegged its reference rate for the dollar at Rs 46.65 (46.64). Cash/spot was quoted at 1/1.5% paise with cash/tom and tom/spot at .5/.75 paise for both, according to the dealers.
FORECAST: The rupee is expected to remain stable.
Forward premiums
Forward premium has eased in anticipation of India Millennium Deposit (IMD) inflows, which closed on Monday. The six-month annualised premium was quoted at 4.04% (4.14%) with one-year annualised premium at 4.05%(4.09%). "Forward premium went down despite the fact that rupee rallied against the greenback and fell by few paise to 46.65/66 from yesterday's level of 46.61/63" a dealer said. The easing in forward premiums in turn soften call money rates.
Call which began on a high note eased down with inflows from reverse repo. Premium is expected to fall gradually with easing of call rates during the rest of the week. November dollars were quoted at 11/13 paise (11 paise) while in far forwards, April dollars quoted at 94/96 paise (93 paise) with May at 103/105 paise (108 paise), the sources added.
FORECAST: Forward premium is expected to fall marginally.
Gilts
Bond prices during the day moved up by around 20-25 paise because of surge in the liquidity. Prices rallied mostly in the long dated securities. The outflow from government security auction yesterday was negated from RBI's reverse repo auction which infused Rs 3300 crore into the system. Price rise were prominent in the longer end. However, in the medium tenure, prices remained flat. Bond prices were rising for the last couple of days with strengthening of rupees on the back of dollars sales by exporters. The 11.40% 2008 was traded at Rs 101.47 (Rs 101.12) with 12.50% 2004 remained flat at Rs 105.40 (Rs 105.45). On the NSE Deals worth Rs 2,795.55 crore were seen. Deals worth Rs 960 crore were recorded in 11.40% 2008 at a weighted average yield of 11.16%. In the 11.30% 2010 worth Rs 380 crore were seen. The 11.03% 2012 trades worth Rs 330 crore was recorded.
FORECAST: Bond prices seen gaining on Wednesday.
(Compiled by Sujoy Manna)
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