Dawn of JUNE 16th 09

INR@ 47.86 weak on $ strength and stock sell off  , SGX 100 pt down , Exit the 10Y enter the 5Y , 

US manufacturing disappoints , Stocks crumble , $ zooms , commodities retreat – See- Saw

IPO season – Coal India and Yes Bank plan IPOs.

 

INR
INR looks set to drop to 3-week lows on Tuesday with falls in Asian markets expected to weigh though the $’s weakness against some currencies such as the yen may check sharp losses. INR closed at 47.72/73 per $ on Monday after hitting 48, its weakest since May . FII inflow ended at $7.8 billion .Yen rose broadly on Tuesday after weak data in the US and Europe plus a slide in global stocks encouraged caution about the global economy. 1M NDF @ 47.89-99 , SGX Nifty down 100 points of 2.25%.

 

BONDS
Bond yields are expected to rise on Tuesday on concerns over heavy supplies expected later this week.  6.07 % 2014 @ 6.63 % on Monday, below its previous closing of 6.66 %. There were no trades in the 10-Y .  U.S. Treasury debt rallied on Monday on disappointing economic data. U.S. crude futures extended declines for a third day towards $70 a barrel.

 

STOCK
Indian shares fell 2.4 % on Monday, dragged by Reliance Industries after a court asked the Mukesh Ambani-controlled group to sell gas at half the Gov.-approved price to his estranged brother’s firm.     The ruling, which can be appealed by Reliance, sent its shares down as much as 7.85 %.

 

CALL
Call closed unchanged on Monday as excessive cash surpluses in the banking system helped banks bridge their RBI short-falls easily. Call ended at 3.20/30 %, unmoved from Friday’s close. It closed at 3.20/25 % in a low-volume market on Saturday.   Banks parked 1.36 trillion with the RBI.

 

GLOBAL MARKET

DJIA 8,612.13 -187.13  // Nikkei  9,843.67  -196.00

FTSE 4,326.01 -115.94 // Hang S 18,225.63 -273.33

US10Y 3.715 // EUR 1.3806 // Yen 96.86 //  Gold 932.25

Crude  70.51

·         U.S. stocks had their biggest slide in a month on Monday after regional manufacturing data dented optimism about the economy’s health and resource shares fell alongside commodity prices, pressured by a stronger U.S. $.

·         FTSE fell 2.6 % on Monday to its lowest closing level in six weeks, dragged lower by commodity stocks as the firmer $ hurt metal and crude prices.

·         Nikkei average dropped 2 % on Tuesday after weak U.S. regional manufacturing data dented optimism about the U.S. economy’s health, with tech shares such as Tokyo Electron falling on profit-taking.

·         . $ rose broadly on Monday after Russia expressed confidence in the greenback as the world’s reserve  currency, while concerns about the euro zone economy undermined the euro.

·         Gold slipped towards $930 an ounce on Monday, pressured by a broadly firmer $, while easing crude prices dampened bullion’s appeal as a hedge against potential oil-induced inflation.

·         Industrial metal prices crumbled in the face of a resurgent $ and weak U.S. manufacturing data that rekindled economic worries and signaled to traders that demand outside of China remains weak.

·         Oil fell nearly 2 % a barrel on Monday, extending its retreat from a near eight-month high as the $ firmed and stock markets tumbled.

 

INDIA FRONT PAGE

·        Coal India has started talks with the coal ministry for a proposed public offer. The ministry has indicated it is not averse to the listing.
·        Jubilant Organosys is hiving off a part of its 12 billion INR industrial and performance products division to sell it to a strategic investor. It expects to raise 3-3.5 billion INRs from the sale.
·        HDFC as picked up a 26 % stake in Bangalore-based Rural Shores Business Services, a rural BPO firm floated by six technocrats last year.
·        Airlines are considering a fuel surcharge hike after aviation turbine fuel scaled up 12 %, or 4,000 INRs per kilolitre on Monday. The latest hike is the third in this month.
·        Yes Bank plans to sell fresh shares at 4-6 times the price to book value through a follow-on public offer or a private placement, its chief executive said.
·        The Gov. is poised to place a 181.5 billion INR order for the supply of power equipment to state-run NTPC Ltd  and Damodar Valley Corp.