Dawn of 13th Feb09

INR strengthens on stocks, IIP contracts lays basis for rate cut, Bonds down on borrowing and SDL auction, Cash Plenty.

Obama subsidy on troubled mortgages sends cheer in market , Oil and metals continue slide.

FDI in Real Estate?, DLF quits WB, Big TV says no to IPL

Rupee
INR rose on Friday supported by firm Asian stock markets and the USD’s weakness against some regional currencies. INR was at 48.74/75 per USD, above Thursday’s close of 48.85/86. . Nifty stock futures were trading up 1 %, pointing to a higher opening in India.

IIP contracted by 2 % in December and analysts said the growing prospect of negative inflation in coming months bolstered expectations for further interest rates in a slowing economy.

Bonds
Yields edged higher on Friday as investors pared positions ahead of the government’s auction of 80 billion INRs of debt later in the day. 8.24 % 2018 at 6.09 %, above Thursday’s close of 6.07 %. Dealers said the auction should provide cues on market appetite for debt, after the government said this week an extra

460 billion INRs of bonds would be sold before the end of March. Some traders also said yields could rise a bit as the government announced a 83.62 billion INRs state loan auction which will be held on Feb. 17.

Stocks
Shares should climb early on Friday, with cement and steel companies in focus ahead of an interim railway budget due at at 11 a.m. that could cut freight rates. Investors will also be upbeat on firmer Asian markets and a Wall Street rebound on Thursday. Asian markets were trading higher after investor concerns eased on news of a U.S. government programme to subsidize mortgage payments for troubled homeowners.

Call
Call edged lower on Thursday, on lower demand for funds as most banks have already met their requirements for the current reporting cycle. Rates ended at 4.00/10 %, below Wednesday’s close of 4.10/15 %. Banks parked a total of 544.10 billion INRs with it via the reverse repo window, indicating a surplus of cash

Global
DJIA 7,932.76 -6.77 Nikkei 7,818.96 +113.60 FTSE 4,202.24 -32.02 H Seng 13,428.26 +199.96

US10Y 2.784 -0.013 EUR 1.2861 Yen 90.85 Gold 943.25 Crude 34.60

Ø U.S. stocks staged a late rally to close mostly higher on Thursday after Reuters reported the Obama administration was working on a program to subsidize mortgage payments for troubled homeowners.

Ø FTSE Britain’s top share index closed 0.8 % lower on Thursday, weighed by mostly grim blue chip corporate news and a gloomy economic backdrop which hit metal prices and mining stocks.

Ø Nikkei average rose 1.2 % on Friday, breaking a three-day losing streak on hopes for a U.S. government programme to subsidise mortgage payments for troubled homeowners and as exporters gained on a softer yen.

Ø . USD on Thursday rose to session highs against the yen on news the Obama administration is hammering out a program to subsidize mortgage payments for troubled homeowners who have gone through a standardized re-appraisal and affordability test.

Ø U.S. gold futures ended higher on Thursday, rising above the $950 level for the first time since last July as investment buying surged in bullion-backed exchange-traded funds amid economic uncertainty.

Ø Copper prices steadied at slightly lower levels Thursday as investors digested a deal on a U.S. stimulus package and its still-uncertain impact on already dismal demand for industrial metals.

Ø U.S. oil prices fell 5.5 % on Thursday to settle at the lowest point in nearly two months, dragged down by swelling crude stocks in the United States and concerns over the health of the global economy.

India Front Page
Ø Rithwik Projects and a founder of SEW Infrastructure, are the two investors who have emerged as contenders to take control of Maytas Infrastructure Ltd , the construction company linked to fraud-hit Satyam Computer Services Ltd A final decision is likely next week.

Ø The Cabinet appears set to liberalise the flow of foreign direct investment in the real estate sector.

Ø BHEL and NHPC may together build the 2,400-megawatt Tamanti hydropower project in Myanmar, setting the delayed 140-billion-INR project back on track.

Ø DLF Ltd has pulled out of its 28-billion-INR satellite township project in West Bengal.

Ø ADAG Group’s direct-to-home satellite service company, Big TV, has decided to withdraw from the Indian Premier League (IPL) as a ground rights sponsor citing discriminatory pricing by Sony for the on air deal.