Dawn of 13th MAY 09

$ 4M low pushes INR up, Stocks zoom to highest in 7M , If BJP wins left will be left out .Worst IIP fall in 14 years but optimism prevails , OIL sees 60$ , Glits crash on wait and watch, Motilal 23% growth in profit YOY ??.

JP stocks fall on loss , UK Retail , Housing looks up EUR and GBP zoom OIL sees 6M high above 60 , Shrugs US energy dept report , Cu rises on China. Essar to sell company,

DLf to sell stake , Reliance to pay back debt , Godrej delays IPO

 

Rupee
INR @ 49.29 is expected to rise for the 2nd day on Wednesday, riding on a weak $ but gains may be limited ahead of national election results due this weekend.  INR ended at 49.26/28 per $ on Tuesday, 0.5 % stronger than 49.52/53 at close on Monday when it  dropped during trade to 49.70, its weakest since May 6. 1M  NDF were quoting at 49.42/52, slightly weaker than the onshore spot . SGX Nifty down  0.5 %.  $ slumped to a 4M low against a basket of currencies, facing renewed selling amid a recovery in risk appetite that has curbed safe haven buying of $

 

Bonds
Yields should rise for a second day on Wednesday as investors pare positions ahead of auctions and election results.  RBI will auction 70 billion T bills today  and 120 billion of bonds on Thursday. 10Y  ended at 6.41 % on Tuesday, seven basis points above Monday’s closing of 6.34 % but contained within a 6.15-6.45 % range traded over the past 3W.  IIP fell 2.3 % in March from a year earlier, its steepest decline in at least 14 years, but analysts said the economy was still set for recovery from late 2009.

 

Stocks
Shares snapped a 2 D fall and rallied 4.1 % on Tuesday to their highest close in more than 7M as investors began betting the BJPwould win national elections. SENSEX posted its 2nd largest rise after falling almost 50 pointsTraders said investors shrugged off weak economic data.     Industrial output fell at its steepest annual pace in at least 14 years in March, leaving the door open for further interest rate cuts by the RBI.   Motilal Oswal Financial Services Ltd leapt 18.3 % to 115.60 INRs after the financial services firm posted a 23 % rise in March quarter net profit after market hours

 

Call
Rates stayed near the reverse repo rate of 3.25 % on Tuesday on lower demand from banks sitting on piles of cash and other assets.    The overnight money closed at 3.20/30 %, unchanged from its previous close. Banks parked 1.18 trillion INRs with the RBI in its reverse repo auction on Tuesday, showing the extent of cash surpluses in the system.

 

Global Markets
DJIA   8,469.11  +50.34  Nikkei   9,308.16   +9.55 FTSE  4,425.54   -9.96 H Seng  17,173.76  +20.12

US10Y  3.176  EUR 1.3633 (1.3605)  JPY 96.50   Gold 917.00  Crude   58.68

· Dow rose on Tuesday as investors bought into defensive shares, including Pfizer while energy companies climbed as oil hit a 6M high.

· FTSE  ended down on Tuesday as losses in banks and miners offset gains in drug makers, oil producers and Vodafone .

· Nikkei average was flat on Wednesday as Hitachi tumbled after forecasting a fourth year of losses, while Nissan Motor Co jumped after projecting a smaller-than-expected operating loss.

· $ sold off on Tuesday to a four-month low as growing optimism about the global economy boosted investors’ risk appetite and curbed demand for the U.S. currency as a safe haven.   Stronger-than-expected UK retail sales, housing market and industrial production data pushed sterling up well over 1 % versus the $ earlier in the session, while the EUR hit a seven-week high above $1.37.

· Gold ended 1 % higher on Tuesday as a weaker $ and a wider U.S. trade gap prompted fund buying and bolstered the status of bullion as an alternative investment.

· Copper climbed on Tuesday, helped by a fall in the $ as risk appetite improves and by data showing robust investment spending in China, the world’s top copper consumer.

· Oil rose to a six-month high on Tuesday on optimism an economic recovery may prompt rising fuel demand and on buying to hedge against a weaker U.S. $.  Oil trimmed earlier gains after the U.S. Department of Energy (DOE) slashed its 2009 oil demand forecast.

 

India Front Page
· Essar Telecom Infrastructure has approached American Tower Corp for a possible merger or a even a complete sell out, but the talks are at an initial stage, the paper said citing an unidentified person.

· Reliance plans to use its surplus cash to repay about 150 billion INRs, or about 21 %, of its debt, during the current financial year. This will bring down the combined debt of Reliance and its unit Reliance Petroleum which is being merged with it, to about 570 billion INRs.

· DLF Ltd  have raised the stake on sale to institutional investors to nearly 10 % of the company’s equity, from about 6 % earlier, to raise 38.50 billion INRs.

· Godrej group is deferring Godrej Properties’ plan to raise 6 billion INRs through an initial public offer of a 13.5 % stake in the real estate company, until the stock market revives. Instead, funds for immediate need are being raised through banks or private equity.