The Hindu Business Line : Securities decline

MUMBAI: Bond prices fell by around 50 paise across maturities in the domestic debt market on selling pressure by bond traders, but staged a 30 paise recovery by the end of the day.

Market sentiment was low due to a Rs 2,500-crore T-Bill MSS auction and Rs 4,000 crore State-loan sale scheduled on Wednesday.

Prices moved downward, 50 paise lower than the previous closing levels, as the benchmark 7.38 per cent 2015 paper moved to Rs 104.65, before it recovered to Rs 104.92 at an yield of 6.77 per cent. The 7.55 per cent 2010 recovered to close at Rs 105.05 before it had slid to Rs 104.85 during the day.

Profit-booking by traders was also witnessed following rumours of a possible EPF rate hike, said a dealer.

"As the general mood in the bond market is bullish, some value buying was seen towards the late trading hours which pushed up the gilt prices," said a dealer.

"It is likely that the prices in the bond market will remain range bound till the next OPEC meeting and FOMC meeting convey strong signals on interest rates, he added.

Meanwhile, call rates in the inter-bank market were in the range of 4.60-4.80 per cent. Under the LAF window, RBI accepted all 49 bids aggregating Rs 22,860 crore in the one-day reverse repo.

In the CBLO market, 125 trades worth Rs 4,960.30 crore were transacted.