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Our Bureau

Mumbai, Feb 14

Bond prices received another round of hammering on Wednesday following the CRR hike. Total traded volumes on the order matching system were Rs 2,215 crore (Rs 1,650 crore). The 10-year benchmark paper plunged 85 paise and has lost close to Rs 2 over the last two days. Market participants are upset the hike came just two days after the Rs 9,000 crore government securities auction. "The timing of the hike has really hurt traders, particularly primary dealers. It takes more than a day to square off one's positions after the auction and we have all suffered big losses," said a dealer at a private bank. Earlier, there was speculation over the scrapping of the Rs 8,000 crore government securities auction in March. But bond dealers are now wary and think the RBI may recommend the auction to mop up liquidity in the system. Domestic inflation figures are expected to be released on Thursday and may determine market sentiments, said a dealer.

The 8.07 per cent - 10 year-2017 paper opened at Rs 99.80 (8.1 per cent) and closed at Rs 99.89 (8.08 per cent YTM), down from Rs 100.75 (7.96 per cent YTM). The recently auctioned 7.37 per cent - 7 year-2014 paper opened at Rs 96.25 (8.06 per cent YTM) and closed at Rs 96.21 (8.07 per cent YTM), against Tuesday's Rs 96.85 (7.95 per cent YTM).

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