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Mumbai, May 10

Bond prices fell by around 30 paise as excess cash in the system raised concerns over possible RBI action. Total traded volumes on the order matching system were Rs 1,315 crore (Rs 3,030 crore). Dealers said surplus cash of around Rs 25,000 crore in the system would require larger Market Stabilisation Scheme auctions. "The RBI could either announce a bigger MSS auction of around Rs 5,000-6,000 crore or once again raise the cash reserve ratio. But the second action could lead to a further hardening of interest rates and dent the performance of the corporate sector," said a dealer at a private bank. Bond traders are likely to remain cautious as the Rs 10,000-crore government securities auction is scheduled for Friday. The 8.07 per cent - 10 year-2017 paper opened at Rs 99.84 (8.09 per cent YTM) and closed at Rs 99.62 (8.12 per cent YTM), against the previous close at Rs 99.92 (8.08 per cent YTM). The 7.38 per cent- 10 year-2015 paper opened at Rs 95.51 (8.11 per cent YTM) and closed at Rs 95.41 (8.15 per cent YTM).

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