Dawn of 15th July 09

INR @ 48.75 , Revised auction calendar by week end , Stocks set to soar on rains and global cues.

Day of good tidings : SG economy shrugs of recessions & zooms , Australia best business condtions, US retail & producer prices better than expected , Goldman 33% surge in income in trading profits , INTEL cheers

Sterlite , Suzlon , India Bulls , DLF on money raising spree , 42 VCs in line for RBI nod , Pizza Hut and KFC in hot oil.

 

INR

INR @ 48.75 should extend gains for a second day on Wednesday, with firmer Asian stock markets boosting the outlook for FII inflows and underpinned by the $’s weakness against majors.    Share market posted its best close in a week on Tuesday, rebounding 3.4 % after four straight falls, on a global rally on encouraging economic data in Asia and optimism on the financial sector from a prominent U.S. analyst boosted confidence.  At 8:30 a.m. SGX Nifty  up 0.4 %. $ index down 0.25 %. 1M NDF @ 48.84. INR closed at 48.96/97 , stronger than Monday’s close of 49.08/09.

 

BONDS

Yields edged up on Wednesday ahead of supplies this week and tracking higher U.S. Treasury yields on Tuesday.    6.90 % 2019  was at 6.84 %, one BP point above its previous close. The Gov. will sell 120 billion  of bonds on Friday, 20 billion more than planned, but lower than the 150 billion that was being auctioned each week since mid-May.   * The RBI is also due to sell 90 billion of T-Bills on Wednesday. US 10Y rose to 3.45 % on Tuesday, up from 3.35 % late on Monday.  Dealers are awaiting a revised auction calendar by the RBI at the end of the week.

 

STOCK

Rebounded 3.4 % on Tuesday after four straight falls, riding a global rally as encouraging economic data in Asia and optimism on the financial sector from a prominent U.S. analyst boosted confidence.  ICICI Bank ,Reliance Industries & HDFC  led the gains in the main index, a day after it fell to its lowest close in two months.     In Asia, trade-hub Singapore’s economy grew at an annual rate of 20.4 % in the second quarter, ending a recession after four consecutive quarters of contraction. A key measure of business conditions in Australia jumped to its best level in nine months in June.

 

CALL

Rates ended almost steady on Monday on lower demand from banks due to prevailing ample cash conditions.    Overnight call rates ended at 3.25-3.30 %, little changed from 3.20/3.30 % at Friday’s close. It had ended at 3.20/3.25 % in an illiquid market on Saturday.    Banks parked 1.32 trillion I in the RBI’s reverse repo window on Monday, indicating the extent of surplus cash in the banking system.

 

GLOBAL MARKET

DJIA  8,359.49  +27.81  Nikkei  9,304.33  +42.52  FTSE 4,237.68  +35.55  Hang Seng     18,050.40 +164.67 US10Y  3.465  +0.105 EUR 1.3975  Yen 93.55   Gold 924.75 Crude  59.42

·         U.S. stocks managed modest gains on Tuesday as better-than-expected corporate profits overshadowed concerns about weak consumer demand.   

·         Goldman Sachs Wall Street’s biggest surviving securities firm, said quarterly earnings surged 33 % on strong trading results 

·         FTSE  closed up 0.9 % on Tuesday, led by miners, banks and oil producers as impressive corporate data from the United States outweighed mixed economic figures.

·         Nikkei rose 0.5 % on Wednesday after upbeat results from Goldman Sachs and Intel lifted hopes of a recovery for the global economy and helped weaken the yen.   

·         Yen fell on Tuesday as earnings of Goldman Sachs surpassed expectations, stoking modest hopes for an economic recovery and boosting investors’ appetite for stocks and higher-yielding assets.  

·         Gold futures ended slightly higher on Tuesday, as a greater-than-expected increase in U.S. producer prices and retail sales in June boosted bullion’s appeal as an inflation hedge.   

·         Copper scaled one-week highs on Tuesday, as the $ weakened and gains in equities reflected a more upbeat mood on prospects for demand and economic growth.

·         U.S. oil prices dipped on Tuesday as dealers worried a slow and bumpy economic recovery could delay a rebound in ailing world energy demand.   

 

INDIA FRONT PAGE

·         Sterlite Industries is planning to raise up to $1 billion through a fresh issue of shares.

·         Wind turbine maker Suzlon Energy plans to raise about $400 million.

·         Indiabulls Power is planning to raise 15 billionthrough an initial public offering in August. It is expected to file its prospectus in a week.

·          Wine maker and distributor Indage Vintners estimated to have debt of about 3 billion INRs, has scaled down its operations in most regions outside its home base in Maharashtra to battle the financial crisis.

·          43 foreign venture capital investors have been unable to invest in Indian start-ups because the requisite permissions from the Reserve Bank of India have been delayed.

·         DLF Ltd has raised 10 billion through the sale of hotel plots and will raise another 19 billion INRs by the end of this fiscal year through the sale of more plots and its wind power business.

·         The Indian arm of Crocs Inc the maker of brightly-coloured resin shoes, achieved just half of its expected sales at 280,000 pairs in 2008 and opened only seven instead of the planned 14 stores.

·         * Maytas Infra Ltd will consider participating in the bidding to build the Hyderabad Metro Railway project at its July 18 board meet in Hyderabad.

·          Rallis India part of the Tata group, may exit the leather chemicals space.

·         Personal care products maker Marico Ltd has sent out feelers to soap makers interested in buying its two soap brands in Bangladesh, Camelia and Aromatic.

·         Yum! Restaurants, the franchisee for Pizza Hut and Kentucky Fried Chicken brands in India, is facing foreign exchange violation charges that could lead to 19.2 billion INRs in penalties.