Market Round-Up

Call MoneyThe call money rates dipped to 0.50 per cent on Friday, the reporting day, in the absence of demand for funds. Most banks had cove...

Call MoneyThe call money rates dipped to 0.50 per cent on Friday, the reporting day, in the absence of demand for funds. Most banks had covered their positions earlier in the week. Banks report their net liabilities and reserves to the Reserve Bank of India every alternate Friday. The call rates opened at 4-5 per cent, but later dropped to 0.50 per cent at the close. Three-days money was offered at 5-6 per cent and one-day money at around 4.75 per cent, dealers said.

The Securities Trading Corporation of India STCI business turnover was only Rs 100 crore at a weighted average rate of 2.40 per cent, an STCI funds manager said. The rate is a weighted average of the total borrowing and lending transactions by STCI during the day. The Reserve Bank of India mopped up Rs 5,916 crore at the three-day fixed-rate repos auction.

FORECAST: The call rates are expected to rule around the repos rate on Saturday.

Spot Dollar

Good dollar supplies saw the rupee gain by five paise to close at42.49/50 on Friday.

The rupee opened at 42.52/53, slightly higher than its previous close of 42.52/55. However, corporate demand and short covering by banks in initial trades saw it weaken to 42.53/54.

quot;The rupee was expected to touch 42.608230; but good dollar flows and weak corporate demand helped it appreciate,quot; dealers said.

The rupee touched its intra-day high of 42.39/40, but dollar buying interest from banks at this level saw it weaken to 42.49/50 by the close.Cash/tom quoted at 2/5 paise in morning trades to close at 1/2 paise while cash/spot quoted at 5/7 paise and 3/5 paise respectively. The Reserve Bank of India pegged its reference rate for the dollar at 42.49, compared with its previous fix of 42.36.

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FORECAST: The rupee is seen in the 42.42-42.52 band on Monday.

Forward Premiums

Forward premiums softened across all maturities on Friday as the spot rupee gained to its intra-day high of 42.39/40.

quot;Near terms fell by 2-3 paise, but 10-15 paise gains were seen in the far forwards,quot;dealers said. July premiums closed at 25/27 paise, August at 61/64 paise and September at 92/95 paise. In the long forwards, April premiums closed at 345/350 paise 358/363 paise, May at 380/385 paise 393/395 paise and June at 415/420 paise 425/430 paise. quot;There was a fair bit of import cancellations. The State Bank of India was seen receiving in December,quot; dealers said. The six-month annualised forward cover closed at 9.50 per cent, compared with its previous close of 10.20 per cent.

FORECAST: The six-month annualised forward premium is seen in the 9.30-9.50 per cent band on Monday.

Gilts

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The secondary market for government securities remained dull on Friday and showed a generally steady trend. The prices ended marginally up as fears of short-term liquidity eased.

The wholesale debt market of the National Stock Exchange witnessed trading worth Rs 226.95 crore. The newly issued 11.55 per cent government loan maturing in 2001 was traded for Rs 50 crore at a weighted yield of 11.47 per cent.The 13.62 per cent government loan maturing in 1998 was traded for Rs 29 crore at a repos rate of 7.75 per cent for 14 days. The turnover in the debentures was Rs 7.23 crore. The total traded value for the week was Rs 1,025.26 crore.

FORECAST: The government securities are likely to be traded at Friday8217;s level on Monday.