Dawn of 16th July 09
INR @ 48.63 stronger as $ falls on Global optimism, Borrowing Prog. Meeting on Thursday. F.Sec. says no ebbing of weekly borrowing , Cash a plenty , Stocks to zoom on global optimism.
Now US Manufacturing looks up, Fed says worst is over , Intel GS results , optimism returns . Oil rises on fall in stocks.
IDBI , PTC to tap ECM , Nano on road this month , Rabobank bids for Future group retailing business.
INR
INR @ 48.58 & should extend gains to a third day on Thursday as stronger Asian shares boost sentiment for local stocks, but the $’s strength against major currencies could temper the rise. At 8:09 a.m. SGX Nifty up 1.25 %, indicating a higher start in India. The index of the $ ix majors was up 0.3 %. U.S. crude futures climbed above $61 a barrel on Thursday, extending gains from the previous day when prices were boosted by data showing crude supplies fell last week, a weaker $ and rising equities. 1M NDF @ 48.68. INR closed at 48.64/65 on Wednesday, 0.7 % stronger than its Tuesday’s close of 48.96/97. The INR has regained strength after dropping to a low of 49.47 on Monday, its weakest since May 15.
BONDS
Yields were steady Thursday as the market awaited the Gov.’s revised borrowing schedule for first half of the fiscal year.6.90 % 2019 at 6.86 %, one BP above its previous close. RBI and FM meeting in New Delhi on Thursday to finalise the borrowing schedule for the remainder of the fiscal first half after the updated budget for 2009/10 increased the bond issuance estimate to 4.51 trillion I from 3.62 trillion. The Gov.’s weekly borrowing size is unlikely to be reduced from current levels, the finance secretary said on Wednesday. U.S. Treasuries’ prices fell for a third straight day on Wednesday as stocks advanced on good corporate earnings.
STOCK
Indian shares rallied 2.9 % on Wednesday, their second consecutive rise, as upbeat results from U.S. firms Goldman Sachs and Intel helped shore up investor confidence worldwide. Traders said higher start for European bourses boosted investor appetite for riskier bets after the market appeared to lose steam due to concerns about the domestic economy and rich valuations. Bharat Heavy Electricals extended gains after the finance secretary said the Gov. would announce plans to sell small stakes in state firms in 3 to 4 weeks.
CALL
Indian overnight cash rates remained steady on Wednesday as ample liquidity in the banking system prevented any sharp uptick in rates, while demand was lower in the second week of the reporting fortnight. Rates ended at 3.25/3.30 %, unchanged from Tuesday’s close. Banks parked 1.20 trillion INRs in the RBI’s reverse repo on Wednesday, highlighting the extent of the surplus cash in the banking.
GLOBAL MARKET
DJIA 8,616.21 +256.72 Nikkei 9,475.04 +205.79 FTSE 4,346.46 +108.78 Hang Seng 18,573.43 +314.74 US10Y 3.610 +0.135 EUR 1.4061 Yen 94.10 Gold 938.00 Crude 61.73
· U.S. stocks racked up strong gains on Wednesday, sparked by results from bellwether Intel Corp that lifted hopes for a rebound in technology spending and improved corporate profitability. Optimism was further reinforced by manufacturing data that suggested the recession is abating, as well as minutes from the FOMC meeting that showed officials judged that the economic contraction was slowing.
· U.S. corporate results and improving U.S. economic data lifted Britain’s top share index by 2.6 % to its highest close in four weeks on Wednesday.
· Nikkei climbed 2.2 % on Thursday, boosted by shares of high-tech exporters on a weaker yen and after results from Intel Corp lifted hopes for a rebound in technology spending.
· $ fell to a one-month low against major currencies on Wednesday, as better-than-expected results from Intel and Goldman Sachs boosted confidence about corporate earnings and the outlook for the economy.
· Gold rose to a two-week high above $940 an ounce on Wednesday as the $ tumbled after data showed U.S. consumer prices rose faster than expected in June. Bullion was underpinned by a Wall Street rally amid economic optimism.
· Copper surged to a one-month high on Wednesday as the $ weakened and upbeat U.S. corporate and economic numbers spurred investor confidence that the global economy had passed the worst of its downturn.
· Oil prices rose more than 3 % to above $61 a barrel on Wednesday, supported by falling U.S. crude oil inventories and economic optimism following positive U.S. data.
INDIA FRONT PAGE
· MTNL has invited bids from international firms to run its fledgling 3G mobile services.
· Offshore PE firm of group, Rabobank, is in talks to buy a stake in Future Group’s retailing business, Aadhaar Retail. The agri-business fund may pick up a little over 25 % stake.
· Tata Teleservices plans to buy 75 % in international mobile phone and data services provider, Matrix Cellular Services, over three years.
· Panacea Biotec Bharat Biotech and Serum Institute have been given the Indian drug regulator’s approval to start tests and analyses to develop a vaccine for the H1N1 swine flu virus.
· PTC India Financial Services, the investment and financing arm of state-run PTC India plans to raise more than 4 billion INRs through an initial public offering.
· Tata Motor will deliver the first batch of Nano, the world’s cheapest car, in the last week of July.
· Indian Hotels plans to launch its budget hotel brand, Ginger, overseas and is restructuring the brand by divesting unviable properties and adopting a flexible pricing strategy. Roots, the wholly-owned unit that runs Ginger, is also in talks with private equity funds and plans to raise $75-$100 million to expand operations in the Middle East and South East Asian markets.
· IDBI Bank may raise fresh money through a rights issue by the end of the financial year to bolster its capital base for business growth, its chairman said in response to a query at a shareholders’ meeting.
· L&T will be selective in developing port projects after investing close to 11 billion INRs as equity in the business. The investments have been made through its unit L&T Infrastructure Development Projects, in which it holds 78 %.
