MyValueResearch

Dawn of 18th JUNE 09

INR past 48, may rise as Eur recovers, Buy back and WPI to set direction for bonds, 5Y @ 6.61% .Advance tax 230 billion. Reliance falls on Gas.Fed rate hike fades on CPI , Global Economy better but far from good , Fed EX Corp disappoints, OPEC says no production. HDFC and HDFC BK to cut rates by 25 BP, Airlines hike fares on Jet Fuel.

 

INR
INR @ 48.05 @ expected to rebound from one-month lows on Thursday supported by euro strength against the $ but mixed Asian stock markets may prevent a sharp rally.    * The INR ended at 48.13/14 on Wednesday after hitting 48.16, its lowest level since May 18, and about 0.8 % weaker than Tuesday’s close of 47.75/76. INR ost almost 2 % this month, but is up 8.5 % from a record low of 52.2 hit on March 3. 1M NDF @ 48.17. SGX Nifty marginally up 10 points . $ fell against the euro on Thursday to hover near lows struck the previous day after price data reduced expectations for a Fed interest rate hike.

 

BONDS
Yields are expected to be range bound on Thursday as investors wait for weekly inflation data and the results of a buy back auction which will provide clues on investor appetite for debt.  6.07 % 2014 ended at 6.61 % on Wednesday after rising as high as 6.70 %, compared with Tuesday’s close of 6.67 %.  WPI  is forecast to have fallen in the year to June 6 for the first time in at least

 

STOCK
Fell 2.9 % on Wednesday to their lowest close in 3W, as doubts about the health of the global economy dampened sentiment worldwide and sparked profit-taking on an 86 % rally since early March.     Energy giant Reliance Industries which has the most weight in the main index, led the losses falling for a third day following an unfavorable court ruling on gas supplies.

 

CALL
Indian overnight money rates were little changed on Wednesday as a cash surplus in the system comfortably offset banks’ funding needs. 1D ended at 3.20/30 %, steady from its previous close of 3.25/30. Indian companies paid around 230 billion of taxes in advance for the  first quarter of FY10, a finance ministry official said citing provisional data. Banks parked 1.27 billion with the RBI in its reverse repo auction on Wednesday, showing the extent of cash surplus .

 

GLOBAL MARKET

DJIA  8,497.18   -7.49  Nikkei  9,663.48 -177.37  FTSE  4,278.46  -50.11

H Seng17,883.78 -200.82 US10Y 3.692  +0.043  EUR 1.3946  Yen 95.73 

Gold 930.50  Crude   70.88

*  U.S. stocks were mixed on Wednesday, weighted by a downgrade of 18 banks by S&P and a disappointing earnings outlook from economic bellwether FedEx Corp.

*  FTSE ended down 1.2 % on Wednesday, as confidence of a quick global economic recovery ebbed, with commodity stocks down on weaker raw material prices but drug makers and telecoms gaining.

*  Nikkei stock average fell 1.8 % on Thursday, with exporters such as Honda Motor slipping as the yen hovered near two-week highs against the $, whiles banks tracked their U.S. peers lower.
 
*  $ fell on Wednesday after tame U.S. inflation data dampened speculation the Fedl would raise interest rates anytime soon.  A run-up in equities in recent months and much better-than-expected numbers on the jobs market have spurred expectations the U.S. recession might end this year and that rates will go higher sooner rather than later. But investors pared back such expectations after a Labor Department report on Wednesday showed U.S. consumer prices rose just 0.1 % month on month in May, but fell over the past 12 months by the most since 1950.

*  Gold futures reversed initial losses to end higher on Wednesday as investors took heart on a $ drop and higher crude oil prices, and as new precious metals investment funds spurred fresh buying.

*  Copper ended little changed on Wednesday, after hitting a near two-week low, as prices held to a narrow range later in the session amid growing concerns over the global economic recovery and its impact on future demand.

*  Oil rose on Wednesday, supported by Gov. data showing a drop in U.S. crude supplies, gains in the stock market and a weaker $.     Further gains came after the oil minister from Qatar said the OPEC was unlikely to hike output soon.

 

INDIA FRONT PAGE

*  HDFC & HDFC bank  are set to reduce IR on term deposits by up to 25 BP.

*  SpiceJet  IndiGo and GoAir are likely to raise fares by 8-10 % from next week.
 
*  Pipe-maker Man Industries  has put its $120 million U.S. pipe mill project on hold due to poor global market conditions and slackened interest in oil and gas exploration and production.

*  BHEL will partner private construction firms to build overseas hydropower projects and is in talks with companies including Patel Engineering Ltd.

*  The petroleum ministry has directed Reliance Industries to make additional allocation of natural gas from its Krishna-Godavari basin find to nine power companies from the surplus available because of no or low off-take by fertiliser units.

*  Fiat India Automobiles Ltd, the joint venture between the Fiat and Tata Motors may consider entering the 600 cc car segment.