NSE REPORT
Primary dealers made huge profits yesterday by selling off a lot of the 12.32 per cent 2011 security at higher levels than the weighted average price of Rs 103.60 arrived at in the auction held on Tuesday.
The Reserve Bank of India's (RBI's) decision of not pursuing open market operations yesterday helped the primary dealers further.
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However, the price of the 12.32 per cent 2011 gilt fell by four
paise to Rs 103.60 at the end of the day.
Trading volumes at the wholesale debt market of the National Stock Exchange (NSE) aggregated Rs 971.61 crore on account of 150 transactions.
According to dealers, a major factor contributing to the fall security prices in the long-term segment was the rise in the 2-day call rates to around 9.40 per cent.
The 12.32 per cent 2011 saw 15 trades contributing volumes of Rs 160 crore and was traded in the band of Rs 103.57 and Rs 103.64.
"Price movement securities will be in tandem with the movement in call money rates and a rally would only take place subject
to a comfortable level of overnight rates," said a debt market
dealer.
Dealers said the continuous slide of the rupee against the dollar has also been a cause of worry for the market.
"The rupee has now crossed the Rs 43.60 levels against the dollar and concern over its future movement has caused more
attention to be shifted to the forex market," said a market dealer.
The 11.98 per cent 2004 government security was traded for Rs 65 crore at a weighted yield of 10.95 per cent. Price of this security fell by 5 paise from Rs 103.88 to Rs 103.83.