The (early) Lunch Wrap | FT Alphaville

The (early) Lunch Wrap

Good morning New York,

ALPHAVILLE

Indian exit polls are pretty dodgy… so despite what they say, there is still no guarantee that Modi and the BJP will avoid a messy coalition building process once results come out this Friday.

NEWS

Germany on Tuesday launched a renewed diplomatic bid to defuse the Ukraine crisis with a bridge-building visit to Kiev by foreign minister Frank-Walter Steinmeier aimed at closing the yawning gap between the interim government and the pro-Russia separatists. Berlin is seeking to win support for planned round table reconciliation talks backed by the Organisation for Security and Co-operation in Europe ahead of planned presidential elections on May 25, which are backed by Kiev but challenged by pro-Russia separatists in southern and eastern Ukraine. (Financial Times)

India’s markets jumped in early trading , as national election exit polls appeared to confirm a probable victory for opposition leader Narendra Modi. The benchmark Sensex index of leading shares jumped 1.5 per cent to open at a new high of 23,912 – the market’s third consecutive day of record levels – against a backdrop of rising investor anticipation over a change of government. (Financial Times)

India’s Anil Agarwal rebuffs Vedanta privatisation rumours: The scrap metal dealer turned industrial tycoon said he planned to push forward with a long-awaited organisational clean-up that was likely to see Vedanta’s Hindustan Zinc and Cairn India subsidiaries merged with operating company Sesa Sterlite. (Financial Times)

China’s economy slowed further in April as sales and investment in the country’s crucial real estate sector fell sharply. Analysts and even normally tight-lipped Communist party officials are now asking whether the country’s real estate bubble is deflating or bursting after nationwide sales in the first four months fell 7.8 per cent in renminbi terms from the same period a year earlier. (Financial Times)

And, Hangzhou offers window on to China’s property woes. (Financial Times)

Jack Lew, US Treasury secretary, on Tuesday called on Beijing to “renew” a pledge to overhaul its exchange rate policy, in his first visit to the Chinese capital since the renminbi began to reverse its climb against the dollar earlier this year. The renminbi has weakened about 4 per cent against the dollar since January, ending a four-year trend during which China’s currency appreciated almost 12 per cent. The renminbi trades at Rmb6.24 to the dollar, after flirting with the Rmb6 level earlier in 2014. (Financial Times)

PetroChina to spin off key gas pipelines as it joined the ranks of state-owned companies offering up prized assets in order to raise funds for future expansion. PetroChina, the listed arm of China National Petroleum Corp, said it would establish a separate company comprising two of its west-east pipelines, which carry natural gas more than 4,000km from the central Asian border region of Xinjiang to Shanghai and Guangdong, on the prosperous eastern coast. It valued the assets at Rmb29bn-Rmb39bn ($4.7bn-$6.3bn). (Financial Times) (SOE this is what passes for reform – FTAV)

Live Blog: MPs grill Pfizer and AstraZeneca bosses (Financial Times)

Google has lost a landmark case over the limits of data privacy in Europe, leaving it obliged to remove personal information appearing on its search engine servers under certain circumstances. The European Court of Justice decision is a big setback for the US group, which feared an unfavourable ruling would prompt a flurry of requests and suits demanding that allegedly harmful personal content be removed from its servers. (Financial Times)

Essar Energy panel backs Ruia family’s take-private offer: The independent committee of Essar Energy has “reluctantly” recommended minority shareholders accept a hostile offer from the company’s biggest shareholder to take the power and refining group private. The move marks a final admission of defeat by the Essar board, which believes the controversial 70p-a-share bid from the controlling Ruia family “materially” undervalues the FTSE 250 group. (Financial Times)

Airbus said orders and profits dropped in the first quarter amid higher research costs, as the European aerospace group emphasised its focus on restructuring its defence and space divisions this year. Orders more than halved in the first quarter to €21.1bn from €49.5bn in the same period last year, but the company said on Tuesday that it was maintaining its guidance for the year of stable revenues and deliveries. (Financial Times)

ThyssenKrupp returned to net profit for the first time in almost two years and lifted its full-year guidance as cost-cutting measures, divestments and demand for elevators and automotive components helped the crisis-hit steelmaker slowly get back on its feet. ThyssenKrupp’s shares rose 4 per cent on opening as it said it now expects full-year adjusted earnings before interest and taxation to almost double from the €586m achieved in the last fiscal year. (Financial Times)

Bulls trample on quality of mortgage deals: As investors have clamoured for the returns on offer from buying CMBS, a plethora of new lenders have stepped in to help create the mortgages that are bundled into the securities, causing competition among lenders to heat up and loan quality to dip. Now the worry is that a market that all but closed in the wake of the financial crisis, is once again flying too close to the sun. (Financial Times)

Markets: A measure of global stocks is at fresh six-year highs as investors are encouraged to purchase equities by hopes for an improving economic environment alongside ultra-accommodative monetary policy. Something of a fly in the optimism ointment is further evidence of slowing activity in China, which has hit some growth-focused assets such as Shanghai shares, copper and the Australian dollar. But overall the market mood is chipper and the FTSE All-World equity index is up 0.3 per cent to 275.0, its best level since November 2007 and only 5 points below virgin territory. Wall Street is the primary driver of the rally. The S&P 500 closed on Monday at a record 1,897 and index futures suggest the benchmark will add another point when the opening bell rings later in the session. In Europe, the FTSE Eurofirst 300 is adding 0.2 per cent to trade at its best level since May 2008, after Tokyo’s Nikkei 225 welcomed a recovery in US tech stocks to bounce 2 per cent according to the FT’s Global Markets Overview.