Dawn of 11 Feb 09

INR weaker on US stimulus, RBI says will buy Gsecs in auction yields fall, Stocks open lower. Cash a plenty

US stimulus long promises low specifics, Fed no buy back of Sec. : Global markets in a tailspin. OIL FALLS 5%

Wokhardt promoters 40% holding pledged, DLF on borrowing spree, CBI in Satyam

 

Rupee
INR at 48.83 lower than  Wednesday, tracking the USD’s strength against other major currencies and losses in regional stock markets. The USD and the yen held onto hefty gains in Asian trade as risk aversion returned with a vengeance after Washington’s bank bailout package proved long on promises but short on specifics.convertible INR  closed at 48.72/73 per USD on Tuesday, off a low of 48.80 but still 0.3 % weaker than its previous close of 48.57/58.

 

Bonds
Yields fell sharply on Wednesday after the RBI said late on Tuesday it would start buying bonds at federal auctions, calming market concerns of excess supplies.  8.24 % 2018 f was at 6.34 %, 15 BP below Tuesday’s close of 6.49 % after starting at 6.35 %.    India’s RBI said late on Tuesday it would start buying government bonds at auctions starting on Feb. 19.

 

Stocks
Stocks to open weaker on global stocks . Investors bet on stimulus plan in Feb. 16 interim budget .     * Financials, engineering lead gains on rate cut hopes * Bharti, metal stocks drop on profit taking

Rose for a third session in a row on Tuesday, climbing 0.7 % to their highest close in nearly five weeks, but trading was volatile ahead of a stimulus package in next week’s interim budget.

 

Call
Rates edged lower on Tuesday due to low demand for funds in the second week of the reporting fortnight, with most banks having completed their funding needs.   Call rates  ended at 4.00/20 %, from Monday’s

close of 4.10/15 %. Banks parked a total of 458.65 billion INRs with it via the reverse repo window, repo route, indicating surplus funds in the banking system. 

 

Global
DJIA   7,888.88 -381.99  Nikkei   7,945.94  -23.09 FTSE  4,213.08  -94.53 H Seng 13,453.27 -427.37

US10Y  2.835  -0.153  EUR 1.2889  Yen  90.29   Gold  909.75  Crude 37.99

Ø      U.S. stocks tumbled more than 4 % on Tuesday as investors pummeled bank shares on concerns that a reworked plan to shore up the financial sector may not be enough to thaw credit markets and alleviate the deepening recession.

Ø      FTSE  ended down 2.2 % on Tuesday, snapping a five-session winning run, as a revamped U.S. bank rescue plan disappointed investors.

Ø      USD and yen gained on Tuesday as investors took shelter in both currencies amid concerns Washington’s bank rescue plan will not revive the ailing financial sector.

Ø      Fed Chairman Ben Bernanke’s prepared testimony to the House of Representatives Financial Services Committee failed to mention buying of U.S. Treasuries by the Fed

Ø      Gold rallied above $910 an ounce on Tuesday, boosted by flight-to-quality buying as Wall Street, hoping for

Ø      Copper fell on Tuesday from near two-month highs as markets fretted about slumping industrial activity.

Ø      Oil prices fell 5 % on Tuesday to below $38 a barrel after the U.S. government revised its oil demand forecasts lower and on concerns the U.S. stimulus plan unveiled by the Obama administration will not stem the recession

 

India Front Page
Ø      The promoters of Wockhardt Ltd  have pledged 40 % stake with financial institutions such as Infrastructure Leasing and Financial Services Ltd to raise around 3.5 billion INRs. The funds will be used to expand the drug maker’s hospital chain.

Ø      CBI  in charge of investigating the scam of Satyam Computer Services Ltd <SATY.BO>, with the corporate affairs ministry considering the option of referring the probe to the central agency.

Ø      Nimbus Communications, the promoter firm of Neo Sports Broadcasting, plans to issue preferential shares to its institutional investors including Cisco, 3i and Oman Investment Fund for raising 2.5 billion INRs.

Ø      Star Group, has decided to scrap three soap operas being produced for it by Balaji Telefilms Ltd Broadcaster Star is already looking to sell its stake in the television content maker.

Ø      Power Grid Corp of India  plans to set up an overseas subsidiary. It is looking at entering Africa, Central and West Asia as well as India’s neighbouring countries.

Ø      DLF Ltd is expected to secure 20 billion INRs of long term debt in two weeks from public sector banks and other financial institutions.   The company has already secured 10 billion INRs of long-term debt over the last few months.