Bonds recover

Government bonds posted their best single-day gain in five weeks on Wednesday after the Reserve Bank of India (RBI) chief sought to reassure investors the central bank would provide the market necessary rupee liquidity.

RBI Governor Raghuram Rajan also pledged to move slowly if needed in winding down an oil window that provides dollars directly to state-run oil companies, while announcing a bond sale of Rs 8,000 crore ($1.26 billion) on Monday, to inject liquidity in markets. Government securities (G-secs) recovered on fresh buying support from banks and companies. The 7.16 per cent G-sec maturing in 2023 climbed to Rs 88.88 from Rs 88.08 previously, while its yield fell to 8.92 per cent from 9.05 per cent. The 8.12 per cent G-sec maturing in 2020 gained to Rs 95.54 from Rs 94.76, while its yield dipped to 8.98 per cent from 9.14 per cent. The 8.28 per cent G-sec maturing in 2027 moved up to Rs 93.95 from Rs 92.60, while its yield declined to 9.05 per cent from 9.24 per cent. The 7.28 per cent G-sec maturing in 2019, the 8.32 per cent G-sec maturing in 2032 and the 8.20 per cent G-sec maturing in 2025 also closed higher at Rs 92.95, Rs 92 and Rs 93, respectively.

Call rates end lower
Call money rates turned lower at the overnight market due to lack of demand from borrowing banks. The rates ended lower at 8.60 per cent from 8.70 per cent on Tuesday. It moved in a range of 8.85 per cent and 8.60 per cent. The Reserve Bank of India under the Liquidity Adjustment Facility purchased securities worth Rs 40,648 crore in 64 bids at the one-day repo auction at a fixed rate of 7.75 per cent, while it sold securities worth Rs 7 crore from one bid at the one-day reverse repo auction at a fixed rate of 6.75 per cent.