Govt bonds come off highs on profit-booking

MONEY MARKET ROUND-UP

Government bond prices ended up today, but off highs because some investors preferred to liquidate positions before the fresh supply of bonds hits the market later this week, dealers said.

The Reserve Bank of India (RBI) will sell Rs 8,000 crore worth of two gilts on Friday under the government’s regular borrowing plan. Some dealers said lack of clarity on movement of global oil prices after the Organisation of Petroleum Exporting Countries (Opec) reduced its output target today by around half a million barrels per day, also prompted profit-booking in gilts.

Crude oil prices have eased by almost 29 per cent, after touching an all-time high of $147.27 per barrel. Currently, they hover near $104.00 per barrel. At close of trade, the 10-year benchmark 8.24 per cent, 2018 paper settled at Rs 99.14 or 8.3697 per cent yield-to-maturity after touching an intraday high of Rs 99.60.

The 2018 paper had ended at Rs 99.03 or 8.3866 per cent yield-to-maturity on Tuesday.

Call: Ends at 8.95%

Call rates ended off the day’s high of 9.20 per cent today because the demand for funds tapered off towards the close amid limited supply, dealers said. Call ended at 8.75-8.95 per cent compared with Tuesday’s close of 8.60-8.75 per cent.

It touched a high of 9.20 per cent because sudden outflows prompted banks to step up borrowings intraday.