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Gilts trade mixed; Surprise OMO announcement to lift sentiment
• It was expected that the 10-Y benchmark would be part of the first bond auction of FY13
next week. However this did not feature among the 4 instruments selected for the
auction and hence the 10-Y benchmark opened strongly and traded with a positive bias.
Meanwhile, state auction cut-offs came in significantly higher at 9.23-9.49% and this led
to some correction towards the close - the 10-Y G-Sec closed at 8.61% vs 8.62%.
• On the other hand, the 9.15%, 2024 bond figured in the auction list for next week and
was a big loser for the day ending at 8.67% vs 8.61%.
• The RBI threw a big surprise for the markets post closing by announcing an unexpected
OMO buyback worth INR 100bn to be conducted tomorrow. This should act as a booster
for markets before the fiscal year end and bring some cheer before the auctions hit next
week, especially as the 10-Y benchmark is part of the buyback.
• The OIS rates also trended lower in line with the domestic yields and on account of global
risk aversion. The 1Y OIS ended at 8.07-8.09% vs 8.09-8.15% while the 5Y swap closed at
7.55-7.57% vs 7.57-7.63%.
Non-SLR Market
UCO Bank placed 3M CD worth INR 1.75bn @ 10.65%. SBH placed 1Y CD worth INR 2.5bn @
10.05%.
Money Market
Borrowings at the LAF window were around similar levels at INR 1.61tn.However, the
overnight call rates were under pressure due to reporting requirements in this shortened
fortnight. WAR for the day was at 9.53% vs 9.47%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gilts trade mixed; Surprise OMO announcement to lift sentiment
• It was expected that the 10-Y benchmark would be part of the first bond auction of FY13
next week. However this did not feature among the 4 instruments selected for the
auction and hence the 10-Y benchmark opened strongly and traded with a positive bias.
Meanwhile, state auction cut-offs came in significantly higher at 9.23-9.49% and this led
to some correction towards the close - the 10-Y G-Sec closed at 8.61% vs 8.62%.
• On the other hand, the 9.15%, 2024 bond figured in the auction list for next week and
was a big loser for the day ending at 8.67% vs 8.61%.
• The RBI threw a big surprise for the markets post closing by announcing an unexpected
OMO buyback worth INR 100bn to be conducted tomorrow. This should act as a booster
for markets before the fiscal year end and bring some cheer before the auctions hit next
week, especially as the 10-Y benchmark is part of the buyback.
• The OIS rates also trended lower in line with the domestic yields and on account of global
risk aversion. The 1Y OIS ended at 8.07-8.09% vs 8.09-8.15% while the 5Y swap closed at
7.55-7.57% vs 7.57-7.63%.
Non-SLR Market
UCO Bank placed 3M CD worth INR 1.75bn @ 10.65%. SBH placed 1Y CD worth INR 2.5bn @
10.05%.
Money Market
Borrowings at the LAF window were around similar levels at INR 1.61tn.However, the
overnight call rates were under pressure due to reporting requirements in this shortened
fortnight. WAR for the day was at 9.53% vs 9.47%.
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