India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
FII buying in bonds; sentiment cautious ahead of inflation numbers
Government securities
Sovereign bond closed firm today on the back of buying from foreign institutional
investors however the underlying sentiment continues to be cautious due to the
expectation of an imminent rate hike action from the central bank to counter the
inflationary trend. As per the SEBI data; out of the cumulative INR 48bn invested
by FII (debt securities) in January, INR 41bn have been bought in the last three
days. Although weekly food article inflation showed some slow down, participants
expect that the soaring inflation warrants a rate hike by the central bank.
Swap rated edged lower as traders expected a less harsh action from the central
bank, post the release of disappointing industrial output data and lower weekly
food article number. The one year swap closed 4 bps lower at 7.28% while the five
year swap ended 8 bps lower at 7.89%.
Non-SLR market
Punjab National Bank and UCO Bank placed INR 5bn and INR 4bn of three month
CD respectively at 9.10% while J&K Bank placed INR 1.25bn of three month CD at
9.20%. Axis Bank & Punjab Sind Bank placed INR 1.55bn and INR 1.75bn of five
month CD at 9.65% and 9.62% respectively.
Money markets
Overnight rates ended unchanged from yesterday’s level as demand for funds from
banks tapered off towards the end of the reporting cycle. LAF borrowing saw a
decrease to INR 777bn compared to INR 822bn on Wednesday. Call rates ended at
6.29% while the CBLO rates closed at 6.22%. Due the central bank’s OMO
exercise, the overnight have eased from 7% plus level in mid Nov to close to the
repo rate in the current fortnight.
No comments:
Post a Comment