The Hindu Business Line : Bond prices rise; rupee unchanged

MUMBAI: Bond prices rose by nearly 75 paise in medium term papers as market sentiment improved after Tuesday's dated securities auction received a good response.

Dealers said that current price levels seemed comfortable for buying bonds. The improved outstanding amount in the 7.55 per cent 2010 paper also increased trading interest in the paper. The 11-year benchmark 7.38 per cent 2015 paper rose nearly 80 paise during the day to Rs 101.60 but closed slightly lower at Rs 101.40 at a yield of 7.19 per cent. The yield was 10 basis points lower than the previous close at 7.29 per cent.

Trading interest was seen in the newly auctioned papers as 7.95 per cent 2032 paper closed higher by nearly two rupees at Rs 98.75, while the 7.55 per cent 2010 paper ended at Rs 102.50.

Call rates in the inter-bank market were 6.00-6.25 per cent higher than the repo auction rates. The central bank injected funds aggregating Rs 7,915 crore by 30 bids in the one-day repo auction, while in the one-day reverse repo auction, two bids worth Rs 170 crore were accepted.In the CBLO market, 113 trades worth Rs 5,249.75 crore were transacted in the rate range of 5.90-6.10 per cent.

The rupee held its ground at a five month high, ending at 45.1650/1750 against the dollar, more or less unchanged from the previous closing levels of 45.16/17. After appreciating to 45.11 per dollar during the day, the currency weakened as corporates stepped up demand, dealers said. They added that some State-run banks were also active in the forex market, perhaps at the behest of RBI.

Forward premia ended lower on expectation of another rate hike by the Federal Reserve, dealers said. The six-month forward closed at 2.26 per cent (2.60 per cent), and the twelve-month at 1.86 per cent (2.09 per cent).