Dawn of 4thFeb09

Yields rise on Auctions and Govt. proposed increased borrowing, Stocks rise on US, Australia and Japan, stimulus, Tata Motors 33% drop in sales, Interim Budget on 16th Feb, Cash surplus

US Jobs, BOE & ECB Rate?, Rise in US pending home sales, Law makers move closer to BAIL OUT, Copper up 7%, Vodaphone Cheers

RBS Asian assets might be sold, Vedanta & Indian Rayon Tax scanner, Balrampur Chini accounts under scanner, Chevron to exit India, Realty Bites: Omaxe, Shoba debt restructuring , BPTP wants to return bought land?

Rupee

INR opened at 48.64 . INR inched higher on Wednesday on the back of firmer Asian stock markets, but the

USD’s strength overseas is seen limiting sharp gains. Tuesday INR closed at at 48.61/62 per USD, above Tuesday’s close of 48.81/82. USD was up against a basket of currencies ahead of U.S. jobs data and rate decisions by the ECB and BOE

Bonds

Yields are seen holding near 7W highs on Wednesday, ahead of 212.5 billion INRs ($4.4 billion) worth of supplies this week. The RBI will auction 95 billion INRs of T-Bills , day followed by 47.49 billion INRs of 10Y SDLs on Thursday. The govt. will auction 70 billion INRs of bonds on Friday. A senior government official said on Tuesday it may announce additional borrowing for the current year ending March at its interim budget on Feb. 16. [ The 8.24 % 2018 ended at 6.37 % on Tuesday, just off the day’s high of 6.38 %, a level last seen on Dec. 11, well above Monday’s close of 6.22 %.

Stocks

Indian shares to open lower on weakness in Asian markets . Indian shares provisionally closed 2 % higher on Friday after domestic funds bought into firms with earnings potential such as Reliance Industries The SENSEX provisionally rose 2.03 %, or 187.13 points, to 9,423.41 after opening 1.4 % lower. Moves by Australia and Japan to support their ailing economies set the stage for a rebound across markets in Asia and Europe, but traders were cautious about the outlook for Indian stocks. Tata Motors fell 6.4 % to 133.50 INRs after it reported a 33 % drop in January sales.

Call

Rates eased on Tuesday as banks had adequate funds for reserve needs even though it is the first week of the reporting fortnight when demand is typically higher. Call money ended at 4.10/20 %, a shade lower from its previous close of 4.15/25 %. Indian banks’ loans rose only 22.1 % in the two weeks to Jan. 16

Banks parked 587.70 billion INRs with the RBI through its reverse repo auctions on Tuesday, , showing surplus cash in the system.

Global

DJIA 8,078.36 +141.53 Nikke 7,994.09 +168.58 FTSE 4,164.46 +86.68 H Seng12,999.26 +222.37

US10Y 2.863 +0.137 EUR 1.3000 Yen 89.47 Gold 904.50 Crude 40.95

Ø U.S. stocks rose on Tuesday as news of an alternative stimulus plan from Senate Republicans suggested lawmakers were moving closer to a package that would soften the blow of a deepening recession.

Ø FTSE ended 2.1 % higher on Tuesday to snap a three-day losing run, boosted by gains in Vodafone after the group raised its forecasts, and in oil producers.

Ø Nikkei rose 2.2 % on Wednesday as TDK Corp and other tech shares gained on hopes they may be early winners in an economic recovery though fears that such a recovery is distant capped gains.

Ø USD fell against the euro on Tuesday after an unexpected jump in U.S. pending home sales in December, easing demand for the greenback as a haven.

Ø Gold turned higher in Europe on Tuesday as interest in assets such as bullion-backed exchange-traded funds as a safe store of value reversed the previous session’s near 3 % slide.

Ø Copper rose almost 7 % to snap a three-day fall on Tuesday on optimism over U.S. home-sales data, but rising inventories capped greater gains.

Ø Oil prices rose slightly on Tuesday after OPEC signaled it might deepen its record output cuts to help boost prices and drain bloated stockpiles.

India Front Page

Ø IDBI Bank is likely to merge its IDBI Homefinance with itself after the board of the bank decided to indefinitely postpone the plan to sell the company.

Ø Henkel Indiais understood to have put a handful of non-core brands on the block and mandated Mape Advisory Group to find buyers for these brands.

Ø International and regional banks are said to be eyeing RBS Asian assets with the Edinburgh headquartered bank likely to come under intense pressure due to an anticipated $41-billion loss in 2008

Ø Vedanta Resources Plc and Indian Rayon face a potential tax demand of about 9 billion INRs and 450 million INRs respectively for their failure to deduct taxes on payments to buy Indian assets.

Ø The ministry of corporate affairs has begun prosecuting directors of Balrampur Chini Mills Ltd for not complying with accounting standards of the Companies Act.

Ø US oil major Chevron Corp plans to exit its unprofitable ventures that may include its investment in Reliance Petroleum a subsidiary Reliance Industries

Ø Sobha Developers is in the process of restructuring 45 % of its debt. The company has around 19 billion INRs of debt on its balance sheet.

Ø Omaxe Ltd is in talks with banks and other lenders to restructure more than half its debt in a bid to reduce cost and match payments with cash flows.

Ø Cairn India Ltd has got the Rajasthan government’s nod for completion of the remaining part of its 600-km-plus crude oil pipeline from Barmer fields in the state to Salaya in coastal Gujarat.

Ø BPTP, the Faridabad-based developer which clinched a 95-acre plot in Noida with a bid of 50.06 billion INRs in March last year, does not have that kind of money and wants to return it to the government.

Ø Bajaj Electricals plans to slash discounts by 2-5 % to save on margin and improve balance sheet for the fourth quarter ending March 31.