Dawn of 21stJan09

Rupee falls FIIs sell 600 million in month, Bonds rally , Stocks fall Wipro sounds warning bells, Call ample surplus of 49,000+ Cr

Obama welcome with stock slide , Euro zone recession : USD 7.5 yrs high against euro , copper slips , Oil rises on short covering,

Radico Stake Sale, DLF restructures, Educomp accounts under scanner

Rupee

Ø      INR dropped to more than 1M lows in opening deals on Wednesday on concerns of capital outflows from the local share market following weak Asian stock markets and the USD’s strength against some currencies.  INR  was at 49.35/37 , a level it last tested in early December, and weaker than Tuesday’s close of 49.20/22 . FII  have sold shares worth about $660 million this month, after selling more than $13 billion in 2008. GBP  hit a 7-½   year low against the USD and the euro touched a 6-week trough on Wednesday on rekindled concerns over losses in the UK banking sector and a deepening recession in the euro zone.

Bonds

Ø      Yields edged down on Wednesday after rising to 1-week highs in the previous session as some investors bought debt ahead of fresh supplies this week.  At 9:20 a.m, 10Y at was at 5.64 %, below Tuesday’s close of 5.68 %. Results of T bill auction worth 95 billion INRs  and also cut-offs at the SDL auction worth 65.51 billion INRs on Thursday will be watched to gauge appetite  gauge appetite.  RBI’s quarterly monetary policy review on Jan. 27 is also awaited, as

Stocks

Ø      Shares are expected to extend losses into a second day on Wednesday, as a fragile world economy dents investor appetite for risky assets.     Wipro , India’s third-largest outsourcer, will be in focus after it reported an 8.7 % rise in quarterly profit, meeting market expectations but cut outlook for the March  Traders said rising FII  outflows were also weighing on market sentiment, adding to the gloomy outlook for quarterly results.

Call

Ø      Rates  eased on Tuesday to close near a little above the RBI’s main borrowing rate, due to ample cash in the banking system following a cut in CRR  over the weekend.    Call money rates ended at 4.20/30 %, lower than Monday’s close of 4.30/40 %.    Banks parked 492.25 billion INRs, up from 432 billion INRs on Monday, through the reverse repo window, showing increasing cash surplus in the banking system.

Global

Ø      DJIA  7,949.09 -332.13  Nikkei   7,909.85 -155.94  FTSE  4,091.40  -17.07 H Seng  12,689.46 -270.31  US10Y  2.374  +0.033 EUR 1.2887 Yen  89.82  Gold 853.25   Crude  38.74

Ø      Wall Street ushered in the Barack Obama presidency with a record Inauguration Day slide on Tuesday amid fresh signs the global bank crisis was far from over.

Ø      FTSE closed 0.4 % lower on Tuesday reflecting another tumble by banks as investors shunned the beleaguered sector, although gains by defensive drug issues and heavyweight oils limited losses.

Ø      Nikkei slipped 2.3 % on Wednesday and hit a 2-month low at one point as Honda Motor Co  and other exporters fell on a stronger yen and growing worry about global financial woes.

Ø      USD hit a 7-1/2-year peak against the GBP pound on Tuesday as losses in the UK banking sector raised worries about the country’s economy.     The USD also rose against the euro on concerns about a deepening euro zone recession.

Ø      Gold prices climbed more than 2 % on Tuesday, rising above $865 an ounce, amid market talk of a large order, with firm investment demand for gold as a haven from risk fueling buying.

Ø      Copper fell 5 % on Tuesday on a stronger USD and as a jump in inventories added to concerns about demand.

Ø      Oil prices jumped 6 % on Tuesday as traders sought to square their books ahead of the expiry of the February U.S. futures contract.

Indian Front Page

Ø      Khaitan family has approached global liquor firms who are keen on a stake in their flagship Radico Khaitan

Ø      Bankers to Maytas Infra will hire an independent auditor to reassess the company’s balance sheet. The lenders have an exposure of more than 30 billion INRs to the company.

Ø      DBS Bank plans to raise headcount in India by 20 to 25 % even as it is laying off 500 employees in Singapore and Hong Kong, its key business centres.

Ø      PE  firm Citigroup Venture Capital International is picking up a 17.7 % stake in Hyderabad-based

Ø      The government is planning to introduce the concept of ‘golden share’ in infrastructure projects being executed through the public-private partnership mode.

Ø      The government said it will seek information from software services firm Educomp Solutions amid speculation it has fudged its accounts, after allegations were made by some brokers that the company had manipulated its turnover figures .

Ø      RBI may allow NBFCs to restructure their loan outstanding on a one-time basis with a one-year repayment period up to 2010, in its credit policy review scheduled on Jan. 27.

Ø      DLF Ltd has started a restructuring and integration process for its five verticals-homes, office, retail, hospitality and infrastructure, to increase productivity in the falling real estate market.