Call money
Call rates were rangebound on Wednesday. Opening THE DAY AT 8.50-8.75%, THE rates quoted a shade higher at 8.80%, but came off by close of trades to 8.60-8.75%. "Call rates closed a wee bit higher at 8.60-8.75% on good demand for funds fearing a liquidity crunch in the next few days on account of advance tax payments. Banks covered for their reserve requirements in the first week of the reporting cycle ahead of Thursday's nation-wide bank strike", a dealer said. Advance tax outflows to the tune of nearly 6,500-7,000 crore are due in the current reporting fortnight. "The liquidity position was fairly comfortable and the market ended squarish", a dealer said. Government security prices moved in a narrow range and closed slightly higher on moderate buying interest. Meanwhile, the RBi's repos and reverse-repos auctions did not get any response as call rates ruled higher than the repos rate of 8%.FORECAST: Call rates seen at 8.50% levels on Thursday; but strike will affect rates.
Spot dollar
The rupee dipped a shade against the dollar on Wednesday. Opening the day at 46.6850/6900, the rupee lost ground to 46.7050/7150 on dollar demand ahead of the of the nationwide strike on Thursday. "The rupee weakened slightly against on late dollar demand from state-owned banks in moderately active two-way trades", a dealersaid. The rupee had gained by around eight paise over the last two days on ample dollar supplies amidst limited demand. State-run banks started bidding for dollars when the rupee touched 46.67/68. "State-run banks, led by the SBI made last minute spot-dollar purchases and put the rupee under mild pressure. Banks were mopping up the excess dollars from the market", a dealer said, Banks have enjoyed dollar-liquidity, thanks to theSBI's $5.5 billionIMD inflow. The RBI pegged its reference rate forthe dollar 46.68 from its last peg at 46.71.
FORECAST: Rupee seen at 46.7950/7050 levels on Thursday.
Forward premiums
Forward premiums closed a shade lower on Wednesday. The 6-month and one-year annualised forward premia closed marginally higher at 3.77% and 3.99%. State-run banks started bidding for dollars when the rupee touched 46.67/68, and the State Bank of India made last minute spot-dollar purchases. Cash/spot finished at 0.58/0.62 paise. December dollars quoted at 2/3 paise, January 16-17 paise while in the far terms, April dollars were seen 59/60 paise with May at 76/77 paise. Call rates closed a wee bit higher at 8.60-8.75% on good demand for funds fearing a liquidity crunch in the next few days on account of advance tax payments. Banks also covered of Thursday's nation-wide bank strike. Advance tax outflows to the tune of nearly 6,500-7,000 crore are due in the current reporting fortnight.
FORECAST: Forward premiums may quote higher on Thursday.
Gilts
Bond prices fell by close of trades on Wednesday. The 11.30% 2010 was seen at Rs 102 with the 11.40% 2008 at Rs 103.2750 levels. The 11.99% 2009 was seen at Rs 106.02. "Bond prices fell in line with a weaker spot rupee, and slightly higher call rates", a bond dealer with a primary dealership said. State-run banks started bidding for dollars when the rupee touched 46.67/68, and the SBI made last minute spot-dollar purchases, which saw the rupee close at 46.7050/7150. Call rates closed a wee bit higher at 8.60-8.75% on good demand for funds fearing a liquidity crunch in the next few days on account of advance tax payments. Banks also covered head of Thursday's nation-wide bank strike. Advance tax outflows to the tune of nearly 6,500-7,000 crore are due in the current reporting fortnight. On the NSE's wholesale debt, trades worth Rs 1,619 crore were seen.
FORECAST: Bond prices seen dipping a shade on Wednesday.
(Compiled by Raghu Mohan)
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