i Develop Stocks Advisory

U.S. Stock Futures Rally on Fed Plan to Lend Up to $200 Billion Indian Market will see gap opening tomorrow to 400/500+ point U.S. stock-index futures rallied after the Federal Reserve announced plans to lend up to $200 billion through a new lending tool. Standard & Poor's 500 Index futures expiring in March climbed 20.3 points, or 1.6 percent, to 1,295.9 at 8:35 a.m. in New York. Dow Jones Industrial Average futures added 163 to 11,942. Nasdaq-100 Index futures added 15 to 1,691.75. ``Providing additional liquidity to help markets start to operate again is exactly what the Fed and other central banks should be doing,'' said Piers Hillier, head of European equities at WestLB Mellon Asset Management U.K. in London, which oversees $35 billion. The S&P 500 is down almost 19 percent from its Oct. 9 record amid growing concern that the economy will slip into a recession after banks posted $188 billion in subprime-related losses and analysts forecast earnings for members of the index will decline this quarter and next. Fed Announces Plan to Lend $200 Billion Federal Reserve Actions The Federal Reserve announced today an expansion of its securities lending program. Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. As is the case with the current securities lending program, securities will be made available through an auction process. Auctions will be held on a weekly basis, beginning on March 27, 2008. The Federal Reserve will consult with primary dealers on technical design features of the TSLF. In addition, the Federal Open Market Committee has authorized increases in its existing temporary reciprocal currency arrangements (swap lines) with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $30 billion and $6 billion to the ECB and the SNB, respectively, representing increases of $10 billion and $2 billion. The FOMC extended the term of these swap lines through September 30, 2008. The actions announced today supplement the measures announced by the Federal Reserve on Friday to boost the size of the Term Auction Facility to $100 billion and to undertake a series of term repurchase transactions that will cumulate to $100 billion.