DAWN OF MAY 29, 2009
INR
INR @ 47.52 and set to gain for a third successive session on Friday, buoyed by sharp losses in the $ versus major currencies, but traders were awaiting the opening of the domestic share market for further direction. Dollex was down 0.34 %. The $ was under pressure after strong U.S. durable goods data on Thursday prompted investors to trim holdings of the safe-haven currency. SGX NIFTY up 65%.
BONDS
Yields are expected to ease on Friday on bargain buying after prices fell sharply in the previous session, with sentiment also supported by lower U.S. Treasury yields. Dealers, however, said a sharp fall in yields was unlikely, as traders would be cautious just ahead of a meeting between the FM and RBI on Saturday to review borrowing needs for the first half of 2009/10. India’s economic growth [is expected to have slowed to a 6Y low of 5.2 % in the March quarter. 10Y ended at 6.73 %, just off a peak of 6.74 %, which was its highest since April 13, and up 10 basis points on the day. U.S. Treasury debt prices recovered some ground on Thursday as traders welcomed the conclusion of $101 billion in new issuance auctions that reinforced worries about the country’s growing debt burden.
STOCKS
Rose 1.3 % on Thursday as short-covering on the last day of monthly derivatives and strong results from L&T helped shrug off tepid markets across Asia and Europe. Maverick Indian investor Rakesh Jhunjhunwala believes bold reforms such as opening up the country’s insurance and pensions to foreigners will be critical to quell concerns about the market being pricey and sustain the stock market rally . WPI was at 0.61 % in the 12 months to May 16, matching the previous week’s annual rise, Gov. data showed on Thursday.
CALL MONEY
Rates barely moved at the close of Thursday despite slightly higher demand in the first week of the reporting fortnight. Call closed at 3.20/30 %, unchanged from its previous close. Banks deployed 1.33 trillion at the RBI reverse repo auction on Thursday. The weighted average rate in the call money market was 3.26 %, while in CBLO, it was 2.79 %.
GLOBAL RECAP
· DJIA 8,403.80 +103.78 Nikkei9,457.17+5.78 FTSE4,387.54 -28.69 H Seng 17,858.55 -26.72 , US10Y 3.635 -0.103 EUR 1.3985 Yen 96.39 Gold 957.75 Crude 64.74
· U.S. stocks climbed on Thursday as rising oil prices drove up shares of energy companies and the latest Treasury auction eased worries over demand for Gov. debt.
· FTSE fell 0.7 % on Thursday as renewed jitters over the health of the financial sector hit banks and offset gains by heavyweight oils.
· Nikkei average inched up 0.1 % on Friday, handing back earlier gains after running into technical resistance, but Mitsui O.S.K. Lines and other shipping companies steamed higher after a key industry index rose to an 8M high on Thursday.
· Yen fell broadly on Thursday as a recent spike in U.S. bond yields and strong U.S. economic data attracted Japanese investors into overseas assets. The $ also remained under pressure against the euro, which peaked close to $1.40 on Thursday, as strong durable goods data reduced the need to hold it as a safe haven and concern about soaring U.S. deficits left some worried that the Fed would step up debt purchases.
· Gold rose to a new two-month high of $964.95 an ounce on Thursday as the $ lost more ground against the euro, while silver hit a fresh 9-month peak.
· Copper closed higher on Thursday after strong manufacturing data signaled the economy was stabilizing, which encouraged investors to take on more risky assets such as industrial metals rather than safe havens such as the $.
· Copper for July delivery <HGN9> on the New York Mercantile
· Oil surged past $65 a barrel on Thursday to a fresh six-month high after OPEC decided to keep output unchanged and Gov. data showed a steep drop in U.S. crude inventories.
INDIA FRONT PAGE
· GlaxoSmithKline Pharmaceuticals is in advanced talks to buy at least 51 % in Shantha Biotech from French company, Merieux Alliance, after Sanofi-Aventis dropped out of the race.
· The Aditya Birla Group is unlikely to buy out L&T 11.5 % stake in its unit, Ultratech Cement as it does not want to launch the mandatory open offer, which could scale up its equity to 86 %.
· Reliance Power is in talks with Australian mining firms BHP Billiton and Rio Tinto for a coal mining JV to develop mines allocated to the company and supply coal to its power plants.
· HAL is in early talks with GVK group’s Mumbai International Airport for developing Nashik airport. HAL owns the Nashik airport, which is largely used as a cargo hub.
· The Spice Group, which runs Spice Mobiles is diversifying into financial services with plans to offer asset reconstruction, remittances, over-the-counter exchange and fixed income products.
· The founders of realtor DLF Ltd are planning to sell another 5.5 % stake to raise 10-15 billion INRs. On May 13, they sold 9.9 % to raise 38.6 billion INRs.
