Dawn of 28th July 09
INR @ 48.25 weaker on importer demand , RBI – MONETARY POLICY REVIEW – Reuters Poll – Rates Unchanged – Says inflation a concern , Tata Motors drives stocks into profit.
US New Housing data brings cheer , FTSE 11 sessions +ve equals Dow , $ falls against EURO , Copper Crude surge.
Hotels to raise room rate by 10% on economic recovery , Jet tightens belt to go down from 5th gear.
INR
INR @ 48.29 edged lower on Tuesday ahead of the RBI’s first quarter monetary policy review, but traders were awaiting the domestic market open for cues on direction of fund flows. Dealers said some month-end $ demand from importers and oil refiners was weighing on the local unit. 48.24/25 was Monday’s close. 1M NDF @ 48.33 . SGX Nifty Up were up 0.2 %.
BONDS
Yields were steady on Tuesday as traders preferred to stay on the sidelines ahead of the RBI’s rate decision at 11:15 a.m. At 9:10 a.m., 6.90 % 2019 was at 6.96 %, 1 BP above Monday’s close. At its quarterly review of the economy published on Monday, the RBI said there were signs of inflation firming up while there was a need for fiscal consolidation, to return the economy, to a high growth path.
STOCK
Indian shares are expected to make a cautious start on Tuesday on mixed signals from other Asian markets and as investors await the outcome of the RBI monetary policy. RBI is expected to hold key rates steady at its policy review as growth begins to show some signs of revival and concerns about rising prices are seen deterring further cuts, a Reuters poll shows. Tata Motors Ltd reported an unexpected surge in first-quarter net profit, helped by a change in accounting policy.
CALL
Indian overnight money rates were virtually unmoved near the RBI’s main borrowing rate of 3.25 % on Monday, with banks meeting their funding needs comfortably amid easy liquidity in the system. Banks deployed 1.13 trillion at Monday’s reverse repo auction, showing the extent of cash surplus in the system.
GLOBAL MARKET
DJIA 9,108.51 +15.27 Nikkei 10,062.88 -25.78 FTSE 4,586.13 +9.52 H Seng 20,182.42 -69.20 US 10 Y 3.725 +0.067 EUR 1.4238 Yen 95.24 Gold 955.00 Crude 68.23
* U.S. stocks rose late to finish Monday’s session with a small gain following two strong weeks as investors bought bank shares that had lagged in the recent rally.
* Buoyant energy stocks and miners helped Britain’s top share index rise for a record-equaling 11th straight session, though gains were limited by falls on Wall Street after corporate earnings disappointed.
* Nikkei average inched down 0.3 % on Tuesday, after a nine-day rally, as stocks that had led the strong run-up such as Advantest Corp fell amid concern about the rapid pace of the rally.
* . $ dropped to a more than seven-week low against the euro on Monday as a jump in U.S. new-home sales bolstered the market’s appetite for riskier assets and dimmed the greenback’s safe-haven appeal.
* Gold rose to its highest level since mid-June on Monday as the $ weakened, with investors gaining fresh appetite for currencies seen as higher risk, while platinum tracked the yellow metal to a near six-week high.
* Copper prices on Monday rose to their highest levels since early October, fueled by optimism about growth in China, the world’s top consumer of industrial metals, and signs of a U.S. housing market recovery.
* Oil prices rose on Monday as strong U.S. homes sales data raised optimism about a turnaround in the economy.
INDIA FRONT PAGE
* Reliance Natural Resources Ltd plans to raise funds though a QIP. The stake dilution will not exceed 25 %.
* Mukesh Ambani’s Reliance Group has started selling flour, pulses and edible oil through a new company in the open market in Mumbai to test the waters before it takes a plunge into the consumer products business.
* Wireless tower operator Crown Castle International is bidding against its close rival, American Tower Company, for a controlling stake in the separated tower operations of Aircel.
* Hoteliers are planning to raise room tariffs by 5-10 % before the peak season begins in September as they see corporate travel perking up on the back of encouraging financial results.
* Jet Airways has begun to trim its financial liabilities through debt repayment, extension of repayment period and deferring capacity expansion. It has a debt burden of 145 billion about five-times its equity. It aims to bring its debt down to below 100 billion by 2011.
* The Andhra Pradesh Gov. will participate in the country’s largest auction of oil and gas blocks through the eighth round of the new exploration licensing policy, Nelp 8. sale.
