Gilts halt 4-day downslide on good demand; call rates end firm

Snapping 4-day losing streak, the government bond (G-Sec) prices staged a solid rebound due to renewed demand from corporates and market participants supported by strong rupee sentiment.
Call rates continued strong momentum at the inter-bank call money market owing to sustained demand from borrowing banks driven by tight liquidity conditions in the banking system.
The 10-year benchmark bond 8.40 per cent maturing in 2024 recovered smartly to Rs 102.65 from Rs 102.48 yesterday, while its yield fell to 7.98 per cent against 8.01 per cent.
The 7.72 per cent government security maturing in 2025 rose to Rs 99.54 from Rs 99.48, while its yield softened to 7.99 per cent from 7.80 per cent.

The 8.15 per cent government security maturing in 2026 spiked to Rs 100.6950 compared to Rs 100.51, while its yield fell to 8.06 per cent from 8.08 per cent.
The 8.27 per cent government security maturing in 2020, the 8.60 per cent government security maturing in 2028 and the 7.68 per cent government security maturing in 2023 were also quoted substantially higher at Rs 101.06, Rs 104.28 and Rs 98.16,respectively.
The overnight call money rates ended marginally higher at 7.40 per cent against Thursday's closing level of 7.30 per cent after trading in a wide range of 7.10 per cent and 6.30 per cent. The 3-day call money rates also shot-up to 8.00 per cent from Rs 8.00 last Friday.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 20.52 billion in 5-bids at the 3-days repo auction at a fixed rate of 7.25 per cent this morning, while it sold securities worth Rs 16 billion from 17-bids at the 1-day reverse repo auction at a fixed rate of 6.25 per cent late yesterday.