MyValueResearch

Dawn of 2nd Dec 08

NR Above 50.50 , Call easy 111 bl Inflows, 10Y Rallies below 7% (<<Aug 2005), Exports Contract in 3Y, Vehicle sales drop, Global Markets Sell of – US says recession, Factory Activity <<1982, Triedent to open in 10-12 days Taj takes longer ,Tata Motors borrows (11%) from public for Jaguar

RUPEE

Ø Stop Press : INR above s at 50.50 The Indian INR weakened towards a record low on Tuesday on fears of sharp FII outflows after heavy losses in stocks around the world, and 10-year bond yields fell below 7 % to their lowest in more than three years. 9:10 a.m. the partially convertible INR was at 50.47/50, compared with Monday’s close of 50.30/32 per dollar on Monday. In early trade, it touched 50.55 and had hit a record low of 50.60 on Nov. 20. Traders said state-run banks, thought to be acting on behalf of the RBI, bought INRs at around 50.50.

CALL

Ø Rates ended lower on Monday on low demand for funds as most banks had already met their reserve requirements in the latter half of the two-week reporting cycle, dealers said. Call closed at 6.10/6.15 %, compared with 6.90/7.00 % at close on Friday. It ended at 6.40/6.50 % in an illiquid market on Saturday. A total of 111 billion INRs is expected to enter the system this week, according to Reuters data, as interest on various bonds and T bill redemptions, further improving cash supplies with banks. Banks parked 365.65 billion INRs with the RBI at its daily reverse repo auctions and borrowed only 5 billion INRs via repos, indicating surplus funds in the system.

BONDS

Ø The 10-year bond yield was at 6.99 % compared with Monday’s close of 7.06 %. It hit a low of 6.98 % in early deals, its lowest since August 2005. India’s manufacturing industry contracted sharply in November, a survey showed, and economists said fallout from last week’s attacks on Mumbai risked deepening a deceleration already underway due to the global financial crisis.

STOCKS

Ø Stocks fall 2.8 pct, INR heads toward all-time low . Indian shares shed 2.8 % and the INR fell towards an all-time low on Monday as a slew of weak economic data and shaky European markets rattled investors after last week’s deadly attacks on Mumbai. Shrinking manufacturing activity as well as falling vehicle sales and exports provided fresh evidence of a rapidly slowing economy, which kept alive expectations for easier monetary policy . Exports in October contracted an annual 12.1 %, the first year-on-year decline in nearly three years.

GLOBAL

Ø DJIA 8,149.09 -679.95 Nikkei 8,011.69 -385.53 FTSE 4,065.49 -222.52 Hang Seng 13,462.41 -646.43 US10Y 2.757 -0.165 EUR1.2620Yen 93.19 Gold 778.00 Crude 49.31

Ø U.S. stocks tumbled on Monday as news pointing to the deepening economic slump around the world erased the bulk of last week’s sharp gains, with financial services companies and retailers among Wall Street’s biggest casualties.

Ø FTSE slid 5.2 % on Monday as concerns over demand for raw materials hit heavyweight commodity stocks, while weak data highlighted problems facing the UK economy.

Ø Nikkei average tumbled 5.3 % on Tuesday to a 10-day low as exporters such as Honda Motor Co skidded on a strengthening yen amid growing fears about the global economy.

Ø U.S. stocks slid on Monday after data showed factory activity fell to its weakest since 1982 and Federal Reserve Chairman Ben Bernanke said the U.S. economy remained under considerable strain.

Ø The USD trimmed gains against the euro on Monday after Fed’s Bernanke said the US is now better equipped to tackle systemic risks. Bernanke said the U.S. economy remained under considerable strain. He added further interest rate cuts beneath the Fed’s current target of 1 % for its benchmark overnight funds rate were “certainly feasible”, but suggested the Fed would also use other unconventional measures to aid growth.

Ø U.S. gold futures ended more than 5 % lower on Monday as a sharply lower stock market and a higher dollar amid a wave of risk aversion triggered a sell-off in all precious metals.

Ø LME tin jumped almost 6 % on Monday on reports of a plan to build a big stockpile by China, the world’s biggest producer of the metal, before easing as markets took a closer look at the figures.

Ø U.S. crude oil futures settled at a fresh 3-1/2-year low on Monday, after OPEC’s weekend decision to defer any further output cut until mid-December.

INDIA FRONT PAGE

Ø EIH Ltd owner of ‘Trident-Oberoi’, hit by terror attacks in Mumbai, may open the ‘Trident’ in the next 10-12 days while the ‘Oberoi’ will get operational in 3-4 months.

Ø CEO of the retail venture of personal care products maker Dabur India Ltd has quit and the company has scaled down its investment. It has deferred setting up 350 health and beauty stores branded and NewU.

Ø Over half of the fishing vessels operating neat the major ports on the country’s western coast are unregistered, posing a threat to India’s maritime security.

Ø The direct-to-home operators, which has been witnessing a price war due to competition, will soon see prices going up as much at 15 % as the operators pass on the price impact of the weakening INR against the dollar that increases the cost burden of the imported set-top boxes.

Ø BHEL , is likely to sign a pact with Japan’s Toshiba Corp in December to procure technology for making high-powered transmission equipment and offer services in building transmission plants.

Ø Tata Motors Ltd will borrow from the public and will pay up to 11 % annual interest on three-year deposits as the credit crunch limits its ability to refinance loans used to acquire the luxury brands, Jaguar and Land Rover, in June.

Ø Nearly 300 small and medium-sized ancillaries in the Adityapur industrial area have had to shut down because the nearby Tata Motors truck factory in Jamshedpur, which receives supplies from them, has been resorting to weekly closures of five days.

Ø The Taj, owned by Indian Hotels Ltd and hit in the Mumbai terror attacks, is not accepting reservations till the end of 2009. Both the ‘Palace’ wing and the ‘Tower’ wing will be closed for renovation.