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Mumbai, Sept. 4

Bond prices gained by 87 paise buoyed by the huge demand for Government securities, according to dealers. Total traded volumes on the order matching system were substantially higher at Rs 12,555 crore (Rs 9,775 crore). Expectation of lower inflation levels and the falling oil prices maintained the bullish sentiment in the market, said a dealer with a private bank. Banks are buying securities to meet their SLR requirements. Also, even as securities mature, they are not bein g replaced by papers of the same size, which is leading to demand-supply mismatch, said Mr K. Harihar, Treasury head, Development Credit Bank. He also attributed the increased volumes to the comfortable liquidity in the system. The 8.24 per cent-10 year-2018 paper opened at Rs 97.65 (8.60 per cent YTM) and touched an intra day high of Rs 98.59 (8.45 per cent YTM). It closed at Rs 98.48 (8.47 per cent YTM), against the previous close of Rs 97.61 (8.61 per cent YTM). The price of the second highly traded security, 8.24 per cent-19 year-2027 paper, rose sharply by Rs 2. It opened at Rs 89.91 (9.40 per cent YTM) and closed at Rs 92.2 (9.12 per cent YTM), against the previous close of Rs 90.2.

— Our Bureau

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