Bonds firm on sustained buying

<p>Government bonds continued to rule firm on sustained buying by banks and companies.

The 7.80 per cent government security maturing in 2021 shot up to Rs 96.85 from Rs 96.50 yesterday, while its yield declined further to 8.27 per cent from 8.32 per cent. The 8.08 per cent government security maturing in 2022 also rallied to Rs 97.69 from Rs 97.40.

Rupee steady
The rupee held near a three-week high on speculation increasing relative yields on the nation’s bonds will attract foreign investment. Overseas funds added $603 million to investments in the South Asian nation’s government and corporate debt in May.

Call rate drops
The call rate dropped on the call money market on surfeit of liquidity in the banking system. The overnight call money rate moved in a wide range of 7.35 per cent and 6.75 per cent.