Daily Market Report: Friday - November 23, 2012

The Indian rupee opened at 55.20 levels after closing yesterday at 55.21 levels. The Intraday range for the rupee is seen between 55.05-55.40 levels.

The Indian cabinet approved on Thursday a 9.5% government stake sale in state-run power producer NTPC Ltd. The Government plans to raise 300 billion rupees through share sales in state-run companies in the current fiscal year that ends in March 2013.
The disinvestment process starts today with a sale of 4% in state run Hindustan Copper through a share auction. With the start of winter session yesterday the cabinet has approved certain reforms in infrastructure and Pharma sector. The investors would be closely looking at the further developments made during the sessions.

The Asian markets are trading higher after manufacturing surveys from China and the United States raised hopes that the global growth outlook is improving at last.

The Euro was also seen recovering despite data on Thursday pointing to the Euro zone sliding into its deepest recession since 2009. The Spanish auction for 3 to 9 year bonds raised more than targeted amount. The gains were majorly on the back of optimism that a funding deal for debt-choked Greece will ultimately be agreed.

The US markets will be in action today after a day off. The US 10 year Treasury yield is unchanged at 1.68%. India's benchmark 10-year bond yield ended 2 basis points higher at 8.23% after a government source said that the fiscal deficit aim may be breached, potentially resulting in 350-400 billion rupees extra market borrowing.

Outlook: Exporters sell close to 55.30 at least 30-40% for next 3 months or partially for longer term (8-12 months only) keeping a stop loss of 55 levels in case unable to cover at these levels. The rupee is still expected to be weak with some dips in between. Uncovered Importers are still recommended to cover on dips close to 54.50-54.80 levels. Overall USD/INR pair remains in a bullish trend. Rupee is weakening despite dollar getting weak against euro overseas.

(Source: Corporate Communications Team, India Forex Advisors Pvt. Ltd.)