Bonds firm up on good demand

Government securities firmed up on good demand from banks and companies.

The 8.79 per cent government security maturing in 2021 recovered to Rs 99.8525 from Rs 99.74, while its yield dropped to 8.81 per cent from 8.84 per cent yesterday. The 7.83 per cent government security maturing in 2018 also bounced back to Rs 95.2550 from 95.03 previously, while its yield dipped to 8.82 per cent from 8.86 per cent.

The 9.15 per cent government security maturing in 2024 shot up to Rs 101.3650 from 101.10, while its yield declined to 8.97 per cent from 9.0 per cent. The 7.80 per cent government security maturing in 2021, the 8.30 per cent maturing in 2040 and the 8.28 per cent maturing in 2027 settled higher at Rs 93.4375, Rs 91.25 and Rs 93.10, respectively.

The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 1,35,440 crore from 54 bids at one-day repo auction at a fixed rate of 8.50 per cent and sold securities worth Rs 10 crore from one bid at one-day reverse repo auction at a fixed rate of 7.50 per cent.

CALL RATE WEAK
The call rate remained under pressure following excess flow in banking system amid lack of demand from borrowing banks. After moving in a range of 8.75 per cent and 8.40 per cent, the overnight call rate closed lower at 8.40 per cent from the previous close of 8.65 per cent.