Indian FX/debt factors to watch - Feb 1

GLOBAL MARKETS ROUNDUP
* Asian shares wiped earlier gains on Friday as a tepid
Chinese manufacturing report dented sentiment, leaving investors
on tenterhooks ahead of U.S. nonfarm payroll data due at 1330
GMT.
* The yen plumbed fresh multi-year lows against its G3 peers
on Friday, having posted its biggest monthly decline in 12 years
versus the euro as the market positioned for more aggressive
easing from the Bank of Japan.
* Brent crude oil futures rose to three-month highs on
Thursday, widening its premium over U.S. crude, concerns about
rising crude stockpiles in the U.S. Midwest prompted heavy
trading based on the spread between the two benchmarks.
* U.S. Treasuries were little changed in Asia on Friday,
with all eyes on the jobs report due later in the day as
investors seek to gauge the speed of recovery in the U.S. job
market, which holds the key to the U.S. monetary policy outlook.

LOCAL MARKETS PREVIOUS CLOSE
* BSE index 19,894.98 (-0.55)
* NSE index 6,034.75 (-0.35)
* Rupee 53.2150/2250 per dollar (53.30/31)
* 10-year bond yield 7.91 pct (7.89 pct)
* 5-year OIS rate 7.26 pct (7.25 pct)
* 1-year OIS rate 7.63 pct (7.62 pct)
* Call money 7.75/7.85 pct (7.75/7.85 pct)

FACTORS TO WATCH
* Manufacturing PMI for January to be released at 0500 GMT.
* Montek Singh Ahluwalia, deputy chairman of the Planning
Commission of India will be speaking at a conference on
agriculture sector at 0930 GMT.

OVERNIGHT NEWS
* India's finance minister is putting welfare, defence and
road projects on the chopping block in a last-ditch attempt to
hit a tough fiscal deficit target by March, risking short-term
economic growth and angering cabinet colleagues.
* Indian banks' credit to industry grew at a slower pace in
December, compared with the year-ago period, the Reserve Bank of
India (RBI) said on Thursday.
* The possibility of India losing its investment-grade
credit rating has receded somewhat as a result of economic
reforms undertaken by the government since last September, an
analyst with rating agency Standard & Poor's told Reuters on
Thursday.
* India's central bank tightened rules on Thursday governing
how banks and other financial institutions provision for
restructured loans, based on the recommendations of a panel.

MAJOR DEALS/ACQUISITIONS
* India's ONGC Videsh Ltd (OVL), a unit of explorer Oil and
Natural Gas Corp, will launch its first overseas bond
issue in February to raise about $900 million to fund an
acquisition in Azerbaijan.
* Abu Dhabi's Etihad Airways is in talks with India's Jet
Airways for a potential investment in the Indian
carrier, India's Civil Aviation Minister Ajit Singh said on
Thursday, without giving any details of the possible deal.

Jet expects to finalise a stake sale deal with Etihad "in a
week or so", an executive at the carrier, who declined to be
named said.
* India's DLF Ltd said on Thursday it would sell
part of its wind power assets with a capacity of 150 megawatts
to Bharat Light and Power Pvt Ltd for 2.82 billion rupees ($52.8
million) as part of its plans to reduce debt.

USD/INR NDFs (NY closing prices)
* For up-to-date prices, double click
Close Open High Low Volume
53.47-52 53.45 53.53 53.39 High

FII INVESTMENTS-EQUITIES (Net dollars)

Jan. 31* $180.25 mln#
Month-to-date** $4.06 bln
Year-to-date** $4.06 bln
* Provisional NSE data
** Source: Data as per custodial filing as on Jan. 31 on
SEBI website.
#(As per Reuters conversion, $1 = 53.20 rupees)

FII INVESTMENTS-DEBT (Net Dollars) *
Debt
Jan. 30 -$57.98 mln
Month-to-date $551.08 mln
Year-to-date $551.10 mln
* Source: Data as per custodial filing as on Jan. 31 on SEBI
website.

GOVERNMENT SECURITIES TRADING (Net buy/sell, in rupees)
Jan. 31
Foreign Banks -7.45 bln
Public Sector Banks 7.42 bln
Private Sector Banks -3.70 bln
Mutual Funds 5.74 bln
Others 3.17 bln
Primary Dealers -5.19 bln
Source: Clearing Corp of India Ltd

ISSUANCES
Instrument Amount Date
Dated bonds 120 bln rupees Feb. 1

LIQUIDITY
* The RBI said on Thursday it accepted all 41 bids for 1.04
trillion rupees at its one-day repo auction, through which it
injects cash into the banking system. It said it also accepted
the sole bid for 50 million rupees at its reverse repo auction,
through which it absorbs cash from the system.
* Indian banks' refinancing with RBI falls to 201.99 billion
rupees.
* Indian banks' cash balances with RBI steady at 3.12
trillion rupees.

(Compiled by Swati Bhat)