The Hindu Business Line : Call rates move higher; Sensex crosses 5600

CALL rates in the inter-bank market were significantly higher on Tuesday as deals were struck at 5.00 per cent, dealers said. The rates were in a range of 4.75 to 4.95 per cent with some trades quoted as high as 5.25 per cent, they said.

Tightness in liquidity was witnessed due to demand and supply mismatch as nationalised banks were borrowing heavily in the inter-bank market. According to dealers, the 25 basis point CRR hike and advance tax outflow have impacted liquidity conditions. "Sentiment has been impacted as banks have taken the CRR hike effective from September 18 as a signal of liquidity overhang drying up," said a dealer with a private sector bank.

Call rates have been trading in a range of 4.25 to 4.75 per cent recently.

Tuesday also marked a bull-run on the bourses and the Sensex crossed the 5600 level. The overall market sentiment was buoyed by the higher remittance of advance tax by corporates - indicating sound half-yearly performance, according to analysts.

The Sensex opened flat, but raced to a 60.11-point gain to close at 5605.93. Technology, power and automobile stocks witnessed smart rallies during the day. While, BankEx - the banking scrips' index — on the BSE posted a gain of 1.67 per cent, technology and PSU index on BSE posted 1.33 per cent gains each. Nifty gained 21.45 points (1.24 per cent) from its opening level of 1728.75, to close at 1750.20.

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