Dawn of 7th NOV 08
RBI absorbs >31K, FDI norms eased, FII buy in FALLING MARKETS , IMF says worst since WWII , Global sell of , Oil 7% dowm, copper down 7% , ECB and BOE cut rates .5% and 1.5%
RUPEE
Ø INR fell more than 0.5 % in opening deals on Friday on expectations that losses in overseas markets would lead the stock market to drop and spur foreigners to continue withdrawing their investments. At 9:02 a.m. the partially convertible INR was at 47.95/96 per USD, compared to Thursday’s close of 47.66/69 per USD.
BONDS
Ø Indian federal bond yields eased on Friday as lower prices calmed inflation worries and on improved cash conditions in the banking system. At 9:20 a.m., the benchmark 10-year bond yield was at 7.66 compared with 7.71 % at close on Thursday. It hit a 8-½ month low of 7.42 % last week. Oil was trading close to $61 levels, a little above the 20-month low hit in the previous session.
CALL
Ø Rates dropped on Thursday as banks completed arrangements to meet funding needs for the fortnight on the eve of the reporting day. Call rates ended at 6.20/6.40 %, much lower than the previous close of 6.75/7.00 %. The rates came down today because banks have already squared their positions with just one day to go for the reporting Friday,” Judhistir Nayak, dealer at Allahabad Bank said. The RBI absorbed a total of 318.30 billion INRs via the two reverse repo auctions, the highest in since Oct. 23, while it infused only 12 billion INRs via the two repo auctions, the lowest since Sept. 8, indicating surplus cash in the in the banking system.
STOCKS
Ø Expected to open lower on Friday following big falls in U.S. and Asian markets on concerns that a rapidly slowing global economy would hit demand and hurt corporations’ profitability. Asian stocks fell for a third day and commodity prices tumbled as layoffs and corporate profit warnings piled up. U.S. crude oil futures fell to a 1-1/2-year low below $60 a barrel on expectations for a drastic pullback in energy demand. FII were net buyers of $84 million of shares on Wednesday, when the market fell 4.8 %. They have been net sellers of $12.6 billion so far in 2008.
GLOBAL
Ø DJIA 8,695.79 -443.48 Nikkei 8,512.29 -386.85 FTSE 4,272.41 -258.32 H Seng 13,510.38 -279.66 S 10 YR Bond 3.702 EUR 1.2708 Yen 96.96 Gold 754. Light Crude 61.07
Ø U.S. stocks sold off on Thursday in their worst two-day slide since October 1987 with disappointing corporate outlooks and bleak sales from major retailers fueling fears of a deepening economic downturn.
Ø DJAI tumbled 443.48 points, or 4.85 %, to end unofficially at 8,695.79 and the Standard & Poor’s 500 Index sank 47.89 points, or 5.03 %, to finish unofficially at 904.88, based on the latest available data.
Ø FTSE slid 5.7 % on Thursday, with banks and commodities skidding after a surprise 150 basis-point rate cut by the Bank of England’s which failed to calm investors.
Ø Nikkei average slid 4.4 % on Friday, with Toyota Motor overwhelmed by sell orders after a shock profit warning, while exporters tumbled on a firmer yen and fears of a deepening economic downturn.
Ø The euro fell against most major currencies on Thursday after the ECB cut interest rates by half a %age point, disappointing investors seeking a more aggressive, growth-supportive move. The ECB cut rates by half a %age point to 3.25 %, a relatively small step compared to the Bank of England’s shock decision to slash British rates by 150 basis points to their lowest in more than half a century.
Ø Gold dropped 1 % on Thursday, erasing early session gains as fresh worries about a global recession prompted funds to ditch assets from gold to commodities and stocks.
Ø Industrial metals sank on Thursday, with copper falling nearly 7 % at one point as the poor demand outlook in the face of a global economic slowdown continued to haunt investors.
Ø Oil tumbled nearly 7 % on Thursday one expectations that demand would slow further after the International Monetary Fund predicted developed economies would deliver their worst performance since World War II.
INDIA FRONT PAGE
Ø India’s commerce ministry has proposed extensive changes in FDI guidelines like including those by non-resident entities in sectoral limits, removing foreign institutional investment (FII) towards calculating sectoral equity limits with caveats, and withdrawing key norms on 100% foreign holding and their downstream investments. The changes could impact telecom, infrastructure, real estate and broadcasting.
Ø Ramco Systems Ltd has decided to slash the salaries of senior managers by 10-15 percent, in an effort to control costs. The move is likely to affect close to 220 of its 1,663 employees.
Ø Herbal and nutritional products maker Plethico Pharmaceuticals is picking up around 20 percent stake in a UAE drug retail chain for about $20-22 million.
Ø Reliance Money, the brokerage arm of Reliance Capital is in advanced negotiation for a majority stake in an upcoming commodity and currency trading exchange in Nigeria.
Ø Asset management firm Trikona Capital Projects has set up Apodis Hospitality to invest and operate hotels in India.
Ø MTNL is set to unveil its ultra-high speed fibre-to-home broadband and entertainment services next week.
Ø TCS will focus on its small and medium business units set up in March to tide over the global financial turmoil.
Ø Reliance Industries India’s largest private company, may delay commercial operations of its Jamnagar refinery to early 2009 as it finishes the final testing of the facility.
Ø Reliance Retail Ltd, an arm of Reliance Industries, plans a restructuring exercise involving shutting, relocating or resizing at least 200 of its smaller stores, and has temporarily shelved expansion plans to focus on making existing stores profitable.
Ø Ashok Leyland Ltd plans a vehicle finance company to support sales, either through an acquisition by the Hinduja-owned Amas Bank, or by setting up a new company.
