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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (13543)	10/16/2004 5:40:22 AM
From: Haim R. Branisteanu	Respond to of 116555

Indian Bonds Lower On Profit-Taking; Call Rate Steady MUMBAI (Dow Jones)--Indian government bond prices drifted lower Saturday on mild profit-taking after Friday's gains. Bonds had gained late Friday after the federal oil ministry left domestic petroleum product prices unchanged for the month, calming earlier fears of an increase that would stoke inflation. Saturday's trade was thin as traders avoided building positions ahead of the Reserve Bank of India's semiannual policy paper due on Oct. 26, dealers said. The actively traded 7.38% bond due 2015 closed at 104.05 rupees Saturday, down from INR104.20 at the previous close. Its yield hardened to 6.84% from 6.83% Friday. Bonds are expected move mostly in a small range in the coming week, as the market awaits the RBI's policy announcement. Some in the market bet the central bank will raise its repurchase agreement rate from the current 4.5% in view of a recent surge in inflation. However, several others disagree, saying the central bank is unlikely to hurry a rate hike since the inflation rise was mainly due to external factors, like high global oil prices. The overnight call money rate ended steady at 4.40%-4.60% as banks borrowed to meet cash reserve targets. The foreign exchange market remained closed Saturday. Friday, the rupee closed flat against the dollar at INR45.8550 to the dollar. Dollar forward rates declined, with the one-year forward contract ending at a 2.00% premium to the spot rate, down from 2.06% at the previous close. (MORE) Dow Jones Newswires October 16, 2004 05:00 ET (09:00 GMT)