Dawn of 26th March 09

INR recovers on stocks, Bonds fall on supply, Stocks rally

US housing and durable goods upbeat send cheer, China suggests alternative reserve currency??????, US may expand IMF drawing rights, Oil slips on stock buildup

Trikona investors say wind up, RBS Indian assets Indusind in fray, Hyderabad 100 storey postponed , Nuclear Power Eurobond

Rupee
INR opened at 50.58 .INR rebounded from 1W lows on Wednesday on late gains in the domestic share market and $ sales by exporters, but month-end demand for the U.S. unit capped a sharp rise. INR closed at 50.74/75 , off a low of 51.10, which was its weakest since March 19, and little changed from its previous close of 50.73/74. “Trading was very choppy today, exporters were selling $s above 50.80 levels, while gains in the share market helped. Rally in the Korean won also improved sentiment. One-month NDF were at 51.20/30, weaker than the onshore spot rate.

Bonds
Yields rose on Wednesday as investors waited for details of the government’s borrowing plan for the first part of the fiscal year starting April and an auction of 120 billion) of bonds. 2019 bond yield ended at 6.77 %, higher than Tuesday’s close of 6.71 %, taking its rise this week to 25 points. RBI bought back 100.35 billion through an auction, just above the 100 billion it had offered to purchase, a day ahead of an auction to sell 120 billion of government securities. Chawla said on Tuesday that a private placement of government bonds with the RBI to raise funds to meet the government’s borrowing needs was an option.

Stocks
Shares shrugged off choppy Asian markets and rallied 2.1 % on Wednesday to their highest close since early January, boosted by short covering ahead of the expiry of monthly derivatives contracts. The rise, for the third straight session, took gains to 20 % from the 2009 low hit on March 6, helping the market recoup most losses caused by the corporate fraud unveiled by outsourcer Satyam Computer Services on Jan. 7.

Call
Indian cash rates were little changed on Wednesday as adequate liquidity in the system offset demand from some banks, who stepped up their borrowing before the end of a holiday-shortened week. Call closed at 4.00/10 %, unchanged from its previous close. The market is closed on Friday for a religious festival. Banks parked 444.35 billion INRs with the RBI in its reverse repo auctions on Wedensday.

Global
DJIA 7,749.81 +89.84 Nikkei 8,523.09 +43.10 FTSE 3,900.25 -11.21 H Seng 13,929.97 +307.86

US10Y 2.783 +0.076 EUR 1.3583 Yen 97.72 Gold 929.00 Crude 52.84

Ø U.S. stocks rose in a late rally on Wednesday as upbeat housing and durable goods data fueled hopes that the toll taken by the recession may be abating, more than offsetting concerns the United States may struggle to fund plans to pull the economy out of recession.

Ø Nikkei average rose 0.5 % on Thursday, helped higher by exporters such as Sony Corp after unexpectedly strong U.S. economic data sparked hopes for an economic recovery, boosting Wall Street.

Ø $ fell against the euro in choppy trading on Wednesday after U.S. Treasury Secretary Timothy Geithner said he was open to expanding the use of the IMF Fund’s special drawing rights.

Ø Gold prices rose sharply on Wednesday as the $ weakened after U.S. Treasury Secretary Timothy Geithner talked about a system put forward by China that would replace the $ as the world’s reserve currency.

Ø Copper held steady on Wednesday, paring earlier losses after the $ weakened and a rise in U.S. new home sales boosted sentiment on the economic and demand outlook.

Ø Oil fell more than $1 a barrel on Wednesday as U.S. government data showed crude stocks were at their highest since 1993.

India front page
Ø RBS could raise $1 billion from the sale of its Asia assets, with India bringing in $500-700 million.

Ø Virbac , Sanofi-Aventis and Pfizer are among the multinational pharma companies who have evinced interest in buying the animal healthcare unit of RFCL, the fine chemical business owned by

Ø Investors in the 250 million pound Trikona Capital, the India real estate fund of Trikona Trinity Capital Plc to demand that its fund managers “disposed of all its assets in an orderly fashion”.

Ø The private equity arm of the Aditya Birla Group plans to raise about $2 billion in private equity

Ø Essar Oil Ltd has been offered a 50 % stake by the Kenyan government in a 4 million tonne per annum state-owned refinery.

Ø Nuclear Power Corp of India [plans to raise 3 billion euros in overseas debt to fund a project to be built in partnership with Areva SA

Ø TCS expects revenues of about 4 billion in a year from its microfinance solutions for banks and financial services firms.

Ø IndusInd Bank has entered the race for the Indian assets of the Royal Bank of Scotland that are up for sale.

Ø Reliance Infrastructure has decided to delay the execution of a project to build a 77-acre business district, including a 100-storey tower in Hyderabad, by 6-8 months.