Circumspection, Optimism The Watchwords

Sentiment in the government securities market will be cautiously optimistic this week.

Statements made by top Reserve Bank of India (RBI) officials late last week that the RBI is not targeting any yield level in the gilts market; that it is neither comfortable nor uncomfortable with the yields; and that the OMO is to suck out liquidity will add to the positive sentiment.

Though call money rates are expected to be tight for a couple of days beginning Monday, this will not act as a dampener for trading in gilts. RBI