Auction Size Damper On Gilts, Bonds; Forex Hoard Up

The government securities and corporate bond markets ended last week on a subdued note as the Reserve Bank of India (RBI) decided to enhance the notified amount in the auctions of 91-day treasury bills from the present Rs 250 crore to Rs 1,000 crore for four auctions starting from December 11, 2002, to January 1, 2003.

The rupee ended on a firm note at 48.22/23 to a dollar but forward premiums edged up on the central bank announcement pertaining to the treasury bill.

The 10-year benchmark 7.40 per cent paper, which on Monday touched an intra-day low of 6.37 per cent and was last dealt at 6.405 per cent, finished the week at an yield of 6.374 per cent after opening at 6.342 per cent.

 

On Monday, the sentiment was dampened as the cut-off that emerged at the open market operation sale of the 10.95 per cent 2011 paper for Rs 4,500 crore was lower than market expectations. The cut-off was set at Rs 128.50 as against market expectation of Rs 129.10.

On Tuesday, the long dated papers were buoyed by 60 paise due to Union finance minister