Dawn of 24 March 2009

INR stronger on $ weakness and stock market, Cash a plenty , Bonds auction woes, Stocks fight back with Obama’s help

US says will purge bank’s balance sheet of Toxic assets, Oil up , Cu up , Stock Markets Spiral , $ , gold , Yen Fall as cheer return to Euro. EXISTING HOMES IN US get sold

Rupee
INR opens at 50.20/21 .INR strengthened for a 4th session on Monday, buoyed by strong stocks INR closed at 50.46/47 High of 50.39, but above previous close 50.66/68. In 7 days INR gained 1.7 %, posting its biggest The euro also was stronger against the $. $ sagged as risk appetite improved on a U.S. plan to remove toxic assets from bank balance sheets. Demand and Supply still remains a major concern

Bonds
Yields climbed to their highest in a week on Monday, ahead of auctions of $4.9 billion of debt this week and investors fretting about more supplies in the months ahead. 6.05 % 2019 was at 6.65 %, its highest close since March 17. It had closed at 6.52 % on Friday. Auctions scheduled this week includes 50 billion of SDL & S0 billion I of bills on Wednesday and 120 billion debt on Thursday. The market is shut for a holiday on Friday. On Wednesday, the RBI will buy back 100 billion of bonds.

Stocks
SENSEX up 5.1 % on Monday, its biggest 1 Day rise since early December, after a fresh U.S. rescue package for the financial sector boosted investor confidence across Asia. Battered financial shares that had been on the mend in the past two weeks were among the main gainers, as the U.S. plan to buy up to $1 trillion of toxic assets from banks bolstered global sentiment towards the sector. Tata Motors 3.2 % to 166.05 INRs ahead of the launch of its Nano, slated to be the world’s cheapest car at around $2,000.

Call
Rates ended nearly flat on Monday, after rising in early trades as banks borrowed to meet their reserve needs, on comfortable cash conditions in the banking system. Call closed at 4.00/20 %, off an intra-day high of 4.80 %, but barely moved from Friday’s close of 4.00/25 %. Banks parked 318.40 billion INRs with the RBI through its two reverse repo auctions on Monday.

Global
DJIA 7,775.86 +497.48 Nikkei 8,385.88 +170.35 FTSE3,952.81 +109.96 HSeng 13,581.89 +134.47

US10Y 2.678 +0.043 EUR 1.3673 Yen 97.92 Gold 949.25Crude 53.82

Ø U.S. stocks surged on Monday, with the Dow and the S&P 500 posting their best one-day advance in nearly five months, after the Obama administration unveiled a long-awaited plan to purge toxic assets from bank balance sheets. A report showing a rebound in existing-home sales in February added to the positive tone.

Ø FTSE rose to their highest close in more a month on Monday, tracking a surge on Wall Street sparked by a plan to cleanse banks’ toxic assets and by better-than-expected home sales figures.

Ø Nikkei average briefly climbed nearly 3 % to a more than two-month high on Tuesday, buoyed by bank shares such as MUFG as a U.S. plan to rid the banking sector of bad assets sparked hopes for stability in the financial system.

Ø $ and yen fell on Monday, as investors pared back safe-haven bids on both currencies after the U.S. government unveiled a plan to unlock toxic assets from banks’ balance sheets in efforts to pull the economy out of recession.

Ø Gold fell more than 1 % on Monday as investors moved away from the safe haven amid a rally on Wall Street sparked by a U.S. government plan to relieve banks of toxic assets.

Ø Copper scaled a new 4-½ month high on Monday, as a U.S. plan to cleanse the banking sector of toxic assets boosted the outlook for the economy and demand, while trade data showed robust Chinese import demand for the red metal.

Ø Oil prices hit their highest level in three months on Monday as a U.S. plan to purge banks of toxic assets triggered a rally on Wall Street and brightened the outlook for flagging energy demand.

India Front Page
Ø Tata Tea Ltd the world’s second-biggest packaged tea maker, will consolidate its beverage businesses into a single entity to simplify operations and raise funds.

Ø DLF Assets, owned by the promoters of India’s top-listed real estate firm DLF Ltd is in talks with banks and financial institutions to raise about 25 billion rupees as debt to pay back its parent firm.

Ø Transport services company Arshiya International has deferred its plans of setting up a 1.5-billion-rupee free trade warehousing zone in Oman and is channelling funds into India.

Ø The UB Group plans to enter the tourism industry by promoting its Four Seasons winery at Baramati in the western state of Maharashtra as a lifestyle destination. It plans to invest 1 billion rupees in the venture over the next few years.