Call money closes flat at 6.10/6.20 per cent,Bond eases

Mumbai, Dec 4 (UNI) Interbank call money rates ended the day unchanged from its previous close of 6.10-6.20 per cent, brokers said.

As most banks had already covered for their fortnightly requirements in the first week of the fortnight, demand remained on the lower side. And with the systemic liquidity still being comfortable, call rates traded soft.

The LAF window saw the RBI accepting 33 bids worth Rs. 28,925 crore at the 1-day reverse repo auction.

The CBLO segment saw 288 bids worth Rs.17,257 crore being traded in the range of 5.91-6.05 percent.

As a result of the ample rupee surplus, even the upcoming GOI bond auction (December 8) worth Rs.9,000 crore is not expected to exert much pressure on the liquidity.

Inter bank rates, hence are likely to trade around the current levels, traders added.

Bond yields fell across some segments at the longer end of the curve on yet another productive day for the the market.

Ample systemic liquidity coupled with rallying US Treasuries were chiefly responsible for the bonds to carry on (the momentum) from where they had left in the preceding week.

On the back of weak manufacturing data and hopes that the Fed would lower the interest rates in their meeting next week, US bond prices rose making the sentiment upbeat.

The mood in the domestic market remained positive as well on the back of sufficient rupee surplus which was boosted further by suspected government spending in the forex market.

The AAA 5 year benchmark yield fell by 2 bps at 8.53 per cent while its spread over comparable gilt widened by 1 bp to stand at 114 bps, traders added.

The primary market continued to inspire confidence as well. PNB Housing Finance became the latest corporate to enter the market making it the 6th issue to open in the fortnight. It issued a 10 year paper with the intention of making Rs.100 crore.

On the back of sufficient rupee surplus, corporate bonds are likely fare well in the days ahead.

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