Mumbai, May 20
Bond prices opened lower and fell during the day due to uncertainty over the Rs 13,000-crore auction of G-secs scheduled for May 21.
But they recovered towards the end of trade. Prices ended higher by about 30 paise from the previous close on expectations that the government may lower its borrowing programme as it has received huge gains from the auction of the 3G spectrum, said dealers.
The government has earned around Rs 67,000 crore from telecom companies for the 3G spectrum.
Volumes were lower due to fears over the impending auction. The total traded volumes on the order matching system were to the tune of Rs 15,035 crore (Rs 23,890 crore).
The 10-year benchmark 7.8 per cent 2020 paper opened at Rs 102.27 (7.47 per cent YTM) and closed at Rs 102.89 (7.38 per cent YTM), against the previous close of Rs 102.52 (7.43 per cent YTM). During the day it had fallen to a low of Rs 102.18 (7.49 per cent YTM).
The 8.20-12 year-2022 paper opened at Rs 104 (7.67 per cent YTM) and closed at Rs 104.37 (7.63 per cent YTM), against the previous close of Rs 104.13 (7.65 per cent YTM). During the day it had fallen to a low of Rs 103.75 (7.70 per cent YTM).
Call rate ends flat
The inter-bank call rate ended flat at 3.70-3.80 per cent on Thursday.
Under the liquidity adjustment facility (LAF) conducted by the Reserve Bank of India, there were no bids in the one-day repo auction. In the reverse repo auction, there were 29 bids for Rs 34,915 crore.
In the CBLO auction, there were 550 trades amounting to Rs 50,439 crore in the range of 0.9-3.8 per cent.