MyValueResearch

Dawn of June 12th 09

INR@ 47.48 rise on $ weakness , Inflation historical low 0.13% , IIP data eyed , Gilts may rally on US IR fall, Stocks Profit booking or rise US labor retail better than expectation , China retail and Manu. Good US 30Y Auction sails through yields fall , $ falls on good data as safe haven dilutes.

Interest Rate futures back , LIC & SBI to exit UTI

 
INR
INR @ 47.48 &is expected to inch up on Friday, mirroring gains in other Asian currencies against the $ and supported by higher regional stocks.    The $ edged down against major currencies after improved labor market and retail sales figures in the United States boosted optimism about the economy, eroding the $’s allure as a safe haven. SGX Nifty up 15 points or 0.32% INR ended at 47.60/61 per $ on Thursday, about 0.8 % weaker than Wednesday’s close of 47.24/25.

 
BONDS
Indian federal bond yields should ease on Friday following a drop in U.S. Treasury yields and a slight retracement in global crude prices, but traders will watch IIP data U.S. Treasury prices rose on Thursday, pulling benchmark yields back from eight-month highs above 4 %, as a solid auction of 30-year debt assuaged worries over the nation’s rising budget deficit.  Oil prices fell toward $72 a barrel on Friday, as investors locked in gains from a near 8M settlement a day earlier, but stronger-than-expected China factory output and retail sales data lent support. 10Yended at 6.89 % on Thursday after hitting 6.91 %, its highest since April 8. The bond had closed at 6.79 % on Wednesday.

 
STOCK
Shares snapped a 2D rise and fell 0.4 % on Thursday as investors pocketed a portion of profits from a 3M rally that had boosted the main index more than 90 %.  Infosys  was targeted by sellers after the stock jumped by more than half since early March. ONGC  and  Reliance Industries which had doubled over the past three months, also fell.  HDFC Bank and Bharti Airtel   WPI was at 0.13 % on May 30, a record low since annual data was published from 1977/78, and could turn negative due to a statistical high base a year ago, but rising prices of oil and other commodities could reverse the tide later.    

 
CALL
Indian overnight money rate was little moved on Thursday as cash-rich banks met RBI requirements comfortably.   Banks parked 1.07 trillion with the RBI in its reverse repo auction on

 
GLOBAL MARKET

·         DJIA  8,770.92  +31.90  Nikkei  10,076.28  +94.28 FTSE  4,461.87  +25.12 Hang Seng 19,101.75 +310.72 US10Y 3.862  -0.085 EUR 1.4104 Yen 97.76   97.81 Gold 947.50   Crude   U.S. stocks rose on Thursday, but were off their session highs, aided by rising commodity prices and improving labor market conditions, along with a sharp drop in interest rates. Earlier, after the Gov.’s 30-year bond auction met solid demand, all three stock indexes had risen above 1 %.

·          Banks and pharmaceuticals stocks outweighed a retreat in heavyweight energy companies to leave FTSE 0.8 % higher by the close on Thursday.

·         Nikkei rose about 1 % to hit its highest level in 8M on Friday as improving confidence about the health of the global economy spurred broad-based gains.

·         $ fell broadly on Thursday as improved U.S. labor market and retail sales data raised optimism about an economic recovery and reduced safe-haven demand for the greenback.

·         Gold futures ended higher on Thursday as the $ turned broadly lower, and signs of long-term currency weakness could spur fresh buying of bullion as a hedge against the depreciating greenback.

·         Copper jumped 4 % on Thursday to 8-month highs on growing expectations of a recovery in demand, but analysts cautioned that prices may have risen too far, too fast.

·         U.S. crude oil futures surged above $73 a barrel on Thursday, the highest price since late October, as the $ continued to drop and U.S. equities extended gains on optimism about an economic recovery.

 
INDIA FRONT PAGE
·         India’s financial regulators are set to launch ETI  IR  futures again in the local market as part of a coordinated effort to broaden reforms in the financial sector.

·         Nadathur Holdings, the investment firm of Infosys Technologies co-founder NS Raghavan, has acquired majority stake in Bangkok-based BMC Management Corp, which operates a chain of boutique hotels and resorts in Thailand and Cambodia.
 
·         The unlisted telecom company of the diversified Essar Group, Essar Teleholdings Ltd, has approached insurance firms and banks with a proposal to raise $900 million by pledging a part of its 33 % stake with Vodafone Essar Ltd.

·         DLF Ltd is planning to offload stake in its construction arm, which is an equal joint venture with UK-based construction company Laing O’Rourke. DLF is expected to recover more than 2.5 billion INRs from the stake sale.

·         NTPC  and BHEL will jointly set up a power equipment manufacturing unit with 60 billion INRs in Chitoor district of Andhra Pradesh.

·         SBI and LIC are discussing a proposal with the Gov. to exit UTI Asset Management Company, the country’s fourth largest mutual fund.