Gilts rally on sustained demand, call rates up

The government bonds (G-Sec) rallied for the third straight day following good buying enquiries from banks and corporates amid good liquidity.
The overnight call money rates also remained firm at the overnight call money market today on increased demand from borrowing banks amid tight liquidity conditions in the banking system.
The 8.83 per cent 10-year benchmark bond maturing in 2023 spiked to Rs 100.39 from Rs 99.8425, while its yield dropped to 8.77 per cent from Rs 8.85 per cent.
The 8.28 per cent government security maturing in 2027 rose to Rs 94.62 from Rs 94.16, while yield slipped to 8.98 per cent from 9.04 per cent.

The 8.12 per cent government security maturing in 2020 moved up to Rs 96.45 from Rs 96.12, while yield fell to 8.84 per cent from Rs 8.91 per cent.
The 8.35 per cent government security maturing in 2022 also edged higher to Rs 97.32 from Rs 96.99, while its yield eased to 8.82 per cent from 8.88 per cent.

The 8.24 per cent government security maturing in 2027, the 7.16 per cent government security maturing in 2023 and the 7.80 per cent government security maturing in 2020 also quoted higher at Rs 94.35, Rs 89.05 and Rs 95.33, respectively.
The overnight call money rate resumed higher at 8.00 per cent and fluctuated between 8.10 and 7.60 before concluding better at 7.75 per cent as compared to 7.50 per cent Monday.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 95.12 billion in 19-bids at the 1-day repo auction at a fixed rate of 8.00 per cent today morning, while it sold securities worth Rs 77.08 billion from 12-bids at the 1-day reverse repo auction at a fixed rate of 7.00 per cent last evening.