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Our Bureau

Mumbai, Feb. 27

Bond prices fell by around 10 paise on profit-booking. Total traded volumes on the order matching system were Rs 3,125 crore (Rs 3,000 crore). Dealers said bond prices rose by around 20 paise during the day in anticipation of a reduction in Government borrowing in the Union Budget. The US yields, which eased by 3-4 basis points to 4.60 per cent, also provided comfort to the domestic market. However, selling pressure erased the gains made during the day.

There was excess liquidity of around Rs 23,470 crore in the system on Tuesday, higher than Monday's Rs 18,480 crore. "Earlier, excess liquidity caused a rise of 20 paise in the bond prices. But since the stance of the central bank is about liquidity management, the excess cash in the system made traders nervous," said a dealer at a private bank. The 8.07 per cent-10 year-2017 paper opened at Rs 101.25 (7.88 per cent YTM) and closed at Rs 101.21 (7.89 per cent YTM), almost unchanged from Monday's Rs 101.22 (7.89 per cent YTM). The 7.37 per cent-7 year-2014 paper opened at Rs 97.15 (7.90 per cent YTM) and closed at Rs 96.98 (7.93 per cent YTM), against Monday's close at Rs 97.11 (7.90 per cent YTM).

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