Dawn of May 11

INR zooms to highs on $ weakness, IN Stocks vols rise on elections Us vols decline, Bonds plagued by supplies ,CASH CASH 1.4 trl +

US Stress Test says no stress, Jobs fall lesser , Global Markets and OIL RISE , Toyota says 8.9 $ Bln loss brings JP stocks down. EUR ZOOMS 1.36+

TATA motors plans bond , Emaar MGF 1st Real Govt Bailout for common wealth , SG Govt raise stake in ICICI , Religare AIG AMC

Rupee
INR @ 49.07 & may rise towards 3M highs on Monday as the $ fell to its lowest in 4M against a basket of 6 currencies, but mixed cues from regional stocks could limit the gains. $ index fell as investors, emboldened by a smaller-than-expected fall in U.S. jobs, diversified into other currencies. INR closed at 49.285 on Friday, 1M NDF were quoting at 49.28/31.

Bonds
Yields are expected to rise as the RBI is scheduled to auction 190 billion of bonds and bills this week, but ample liquidity could curb a steep increase. RBI will sell 70 billion of T bills on Wednesday and 120 billion of federal bonds on Thursday. The government has announced it will offer 80 billion of a new five-year bond, and 40 billion of 8.20 % 2022 bond. 10Y ended at 6.38 % on Friday, 14 basis points above Thursday’s close of 6.24 %. Over the week, the yield rose 15 basis points. WPI climbed to 0.7 % at the end of April, rising for the third consecutive week as underlying price pressures persisted. Liquidity in the banking system has been ample, with banks parking 1.47 trillion in the RBI’s reverse repo on Friday.

Stocks
2M surge in Indian stocks on optimism of improvement in global fortunes could be tested by results of national elections due on May 16, with a jump in a volatility gauge seen as a sign of rising investor worries. The NSE Index which measures the expectation of near-term volatility based on index option pricing, has jumped 22.3 % so far in May, while the more widely known U.S. CBOE Volatility Index eased 8.4 % this month up to Thursday.

Call
Indian overnight cash rates were little changed on Friday as a huge cash surplus in the banking system comfortably offset demand from some banks who borrowed for RBI needs on reporting Friday. 3D ended at 3.10/30 %, from its previous close of 3.10/20.

Global Markets
DJIA 8,574.65 +164.80 Nikkei 9,371.88 -60.95 FTSE 4,462.09 +63.41 H Seng 17,527.38 +137.51 EUR 1.3637 Yen 98.74 99.24 Gold 907.00 Crude 58.64

• U.S. stocks rose on Friday, and the Nasdaq capped its longest stretch of weekly gains in a decade as stress test results and reassuring jobs data fueled hopes the worst is over for banks and the economy.
• Gains in resurgent banks and buoyant energy stocks pushed Britain’s top share index to a four-month closing high on Friday, maintaining the strong positive momentum seen since early March.
• Nikkei average fell 0.7 % on Monday, after earlier hitting its highest point in six months, as Toyota Motor Corp skidded after forecasting a much bigger-than-expected $8.6 billion annual loss.
• $ fell to a four-month low on Friday after a better-than-expected U.S. jobs report bolstered hopes the global recession may be easing and dented safe-haven demand for the greenback.
• Gold prices slipped on Friday after U.S. non-farm payrolls fell less than expected in April and investors took signs of an economic recovery as a reason to sell bullion held as a safe store of value.
• Copper drifted to a softer close on Friday, as investors grabbed profits at week’s end after failing to steer an early rally through key technical targets and despite upbeat labor market data in the United States that suggested the economic slump was easing.
• Oil rose more than 3 % on Friday to touch a near six-month high as the results of the U.S. governments stress test for big banks and U.S. jobs data added to optimism about the economy.

India Front Page

• Investors have approached a consumer court in New Delhi against fraud-hit Satyam Computer Services seeking 49.88 billion INRs in compensation for shareholders who lost money when Satyam shares crashed to 11.50 INRs in January.
• Tube maker Essel Propack is exploring the option of picking up a controlling stake in England’s tube maker Betts.
• Tata Motors Ltd which is facing a $2-billion bridge loan repayment by June, is currently exploring options, including an overseas bond issue, to partly repay the loan obligation as there is a reduced appetite for a local bond issue.
• Government will extend a 5-billion INR loan to Delhi-based realty firm Emaar MGF to help it complete the Commonwealth games village on schedule, marking a first ever financial bailout package for a real estate company.
• The government is likely to significantly alter the controversial press notes 2, 3 and 4 in a couple of weeks to close loopholes that give firms leeway to exceed limits on FDI in various sectors.
• SEBI is examining if a proposal by Temasek Holdings and Government of Singapore Investment Corp to raise their stakes in ICICI Bank to 10 % each would trigger the takeover code, where they would have to make an open offer for an additional 20 %.
• Anti-asthma medicines are expected to cost less than a tenth of their prices after the regulator, the National Pharmaceutical Pricing Authority, brought the bulk drug, doxofylline, under price control.
• Religare Enterprises Ltd has bid for AIG Investments, the asset investment management arm of insurer American International Group and could pay $600-$700 million for the acquisition.
• French telecom equipment maker Alcatel-Lucent and Chinese vendor Huawei have bagged a $400 million GSM equipment order from Unitech Wireless, . The contract value is equally split between the two.
• Swedish equipment major Ericsson and Huawei have been shortlisted by Bharat Sanchar Nigam Ltd for its 93-million-line, $6 billion contract.