Gilts React Modestly To Bank Rate Cut

NSE REPORT

Modest trading activity in the government securities counter saw trade amounting to Rs 440 crore on the National Stock Exchange yesterday.

Yields on gilts did not react much to Reserve Bank decision of cut in bank rate by one percentage point to 10 per cent on Wednesday. Nor were the volumes subdued. Even the corporate debentures on the NEAT system reflected healthy trades amounting to Rs 5.07 crore yesterday as against Rs 4.71 crore on Wednesday. Heavy buying enquires saw the yield to maturity (YTM) moving down for the 12.59 per cent government paper maturing in 2004 which is on sale counter of the Reserve Bank of India. The seven-year paper amounting to Rs 132 crore changed hands and the YTM came down by four basis points to 12.54 per cent yesterday.

 

This apart, the 11.75 per cent government stock maturing in 2001 was traded at a weighted yield to maturity of 11.77 per cent. Deals amounting to Rs 35 crore were confirmed on the screen. Besides this, the zero coupon bond maturing in 2000 was traded at a YTM of 11.41 per cent. CPs were quoted at around 9 per cent in line with the inter-bank calls ruling around 9.25 per cent and10 per cent.Dealers confirmed the commercial paper issue by Indo Gulf Fertilisers at a weighted interest rate of 9.20 per cent.