Bonds rally on good demand, call rates retreat

Government bond (G-Sec) prices staged a dramatic rally on the back of good demand from corporates and market participant amid stability in the rupee.
However, the interbank call rates turned weak after a two-day surge due to lack of demand from borrowing banks amidst comfortable liquidity situation in the banking system.
The 7.59 per cent government security maturing in 2029 firmed up to Rs 99.34 from Rs 99.0550, while yield slipped to 7.67 per cent from 7.71 per cent.
The 7.88 per cent government security maturing in 2030 climbed to Rs 101.12 as compared to Rs 100.8975, while yield fell to 7.74 per cent.

The 7.59 per cent government security maturing in 2026 rose to Rs 100.7625 from Rs 100.6125, while its yield moved down to 7.48 per cent from 7.50 per cent.
The 8.27 per cent government security maturing in 2020, the 7.68 per cent government security maturing in 2023 and the 7.72 per cent government security maturing in 2025 were also quoted substantially higher at Rs 103.25, Rs 100.58 and Rs 100.45.

The overnight call money rates ended lower at 6.10 per cent as against Tuesday's closing of 6.40 per cent after moving in a narrow range of 6.00 per cent 6.60 per cent during the day.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 25.17 billion in 6-bids at one-day repo overnight auction at a fixed rate of 6.50 per cent this evening.
It sold securities worth Rs 22.84 billion from 21-bids at the one-day reverse repo auction at a fixed rate of 6.00 per cent late yesterday.