Dawn of 27th March 09

INR on mend on Risk Appetite, 2.4 trillion bonds see red cross 7, SENSEX 10,000 happy days are here or not yet?

Fed says worst may be over, Yen safe haven?, OIL zooms , Cu rises

DLF officially cuts rates , Unitech from luxury to 1 BHK, Dhabol may default?

Rupee
INR rose on Thursday as an extended share market rally and strength in regional currencies raised hopes that rising risk appetite among investors would lead to sustained fund inflows. INR ended at 50.59/61 per $, off a high of 50.46 but up 0.3 % from a previous close of 50.74/75. Markets will be shut on Friday for a holiday. FII have bought a net $619 million worth of shares in the past nine sessions, a key factor helping the INR’s recent rise, trimming their net sales in 2009 to $1.7 billion.

Bonds
Yields jumped to two-week highs above 7 % on Thursday after the government said it would borrow a higher-than-expected 2.4 trillion) in the first half of 2009/10. 2019 yield spiked to 7.18 % from below 7 % after the borrowing plan for the six months from April 1 was announced, at which point it was up 66 basis points from last week’s close. It ended at 7.02 %, its highest close since March 13 and sharply up from Wednesday’s close of 6.77 %. The market will be shut on Friday for a holiday.

Stocks
SENSEX topped 10,000 points on Thursday for the first time since Jan. 7, the day Satyam Computer unveiled the country’s biggest corporate fraud and sparked a slide. SENSEX firmed 3.5 %, extending a rally into the fourth day in a row, after unexpectedly strong U.S. data boosted hopes for a global economic recovery and propelled markets from Wall Street to Hong Kong and Japan higher. Data on Thursday showed inflation heading towards zero, with the wholesale price-based rate up 0.27 % on March 14, the lowest annual reading on record for the current series.

Call
Indian cash rates rose on Thursday on higher demand for funds on the last borrowing day for the current reporting cycle, but the rates eased later in the day after most of the banks funded their bi-weekly reserve needs. The four-day money ended at 4.40/60 %, off an early high of 4.90 %, but above Wednesday’s close of 4.00/10 %. The market is closed on Friday for a religious festival, making Thursday the last day of the two-week reporting period. Banks parked a net 111.50 billion INRs with the RBI showing the extent of cash surplus in the banking system.

Global
DJIA 7,924.56 +174.75 Nikkei8,719.55 +83.22 FTSE 3,925.20 +24.95 H Seng14,176.51 +67.53

US10Y 2.748 -0.051 EUR 1.3553 Yen 98.43 Gold 938.25 Crude 54.07

Ø U.S. stocks rose on Thursday, with the Nasdaq turning positive for the year-to-date, as a batch economic data that was not as dire as expected fed optimism the economy’s worst days were behind.

Ø Gains in banks and miners prompted by recovering risk appetite on Thursday outweighed weakness in oils, retailers and utilities, to leave Britain’s FTSE 100 closing 0.6 % higher.

Ø Nikkei average hit a 2-1/2-month high on Friday with exporter shares such as Canon Inc climbing on a weakening yen and after U.S. data sparked optimism about an economic recovery.

Ø The $ and euro advanced against the yen on Thursday, as investors grew more comfortable buying risky assets such as stocks and commodities, dampening the Japanese currency’s safe-haven appeal.

Ø Gold ended higher after a volatile session on Thursday, underpinned by growing investment appetite and gains in other commodities such as oil and metals.

Ø Copper surged 3 % to hit 4-½ month highs on Thursday, boosted by a rise in U.S. durable goods orders and a jump in new home sales which lifted the outlook for the economy and demand.

Ø Oil prices touched a four-month high over $54 a barrel on Thursday tracking Wall Street as better-than-expected economic data improved investor sentiment

India Front Page
Ø Donna Karen International, part of the luxury goods group LVMH Moet Henessey Louis Vuitton, has signed an agreement with DLF Brands, the retail arm of India’s real estate group DLF, to set up exclusive stores in India.

Ø The Godrej is exploring the possibility of acquiring Sara Lee International’s stake in Godrej Sara Lee following the foreign company’s decision to exit its household and personal care business globally.

Ø DLF has cut rates of one of its upcoming Gurgaon projects by 20 %.

Ø Loans worth 75 billion to the Dabhol power project of Ratnagiri Gas and Power Pvt Ltd are set to turn into non- performing assets, if the project is not financially restructured

Ø Unitech Ltd is planning one-bedroom projects in the 500,000 to 1-million-INR category in Chennai, Kolkata and Gurgaon over the next few months to counter the slowdown in the property sector.

Ø Hydropower producer NHPC Ltd may get to develop 250 billion INRs of hydel power projects in Myanmar.