Indian Stock Market

Overnight call rates continued to touch a high of 7.50% on September 24, with a total turnover reaching at Rs 101.02 billion. Since last two weeks, due to Rupee appreciation followed by inflow of capital in the market, there is excess liquidity in the banking system. To enable absorption of excess liquidity, the central bank absorbed Rs 44.95 billion via 7 bids fo r 1-day reverse repos on Sep. 24, 2007 at a fixed rate of 6%. Easy liquidity conditions were reflected in the money market, with call rates moving around the banks reverse repo rate. Call rates fell at 5.25-6.75% on Sep. 25, 2007, which witnessed a turnover of Rs 119.53 billion .The central bank absorbed Rs 261.80 billion via 25 bids for 1-day reverse repos on Sep. 25, 2007.Call rates remained range-bound at 5.25-7% on Sep. 26, 2007, with a total turnover at Rs 155.77 billion on September 26, from Rs 119.53 billion on the previous working day. Surplus liquidity was reflected through daily reverse repo auction, which amounted to 227.65 billion via 18 bids for one-day reverse repo. In a bid to suck excess cash, central bank issued market stabilization scheme (MSS) bonds of `5.48% Government Stock, 2009 5.87%` and ` Government Stock, 2010 ` worth Rs 100 billion.Overnight call rates continued to be at 5.25-7.5% on Sep. 27, 2007 with a turnover of Rs 140.98 billion. Weighted aver age rate (WAR) at 6.35% on September 28. The Reserve Bank of India (RBI) absorbed Rs 36.65 billion via 1-day reverse repos on Sep. 28, 2007. At the auction conducted under liquidity adjustment facility, the central bank received 5 bids for 1-day repos, which were accepted. However, centre, in order to suck excess liquidity from the system, issued MSS bonds.