India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Tuesday, June 10, 2008
NSE Bulk Deals to Watch - June 10 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
10-JUN-2008,IVRCLINFRA,IVRCL Infra & Proj Ltd,HSBC GLOBAL INVESTMENT FUNDS A/C HSBC GLOBAL INVESTMENT FUND,BUY,1185000,344.73,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,100930,47.52,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,AMRABATHI INVESTRA PVT LTD,BUY,75000,44.50,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,ASSET ALLIANCE SECURITIES PVT. LTD.,BUY,109115,48.20,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,BUY,203336,47.73,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,B K SHAH CO KETAN BHAILAL SHAH,BUY,107854,47.99,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,CPR CAPITAL SERVICES LTD.,BUY,124870,48.81,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,PRASHANT JAYANTILAL PATEL,BUY,131147,46.58,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,R.M. SHARE TRADING PVT LTD,BUY,231176,47.87,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,SANJAY BHANWARLAL JAIN,BUY,142878,47.76,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,TASNEEM K. MASTER,BUY,113412,47.83,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,TRANSGLOBAL SECURITIES LTD.,BUY,277894,46.51,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,100930,47.68,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,AMRABATHI INVESTRA PVT LTD,SELL,75000,49.87,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,ASSET ALLIANCE SECURITIES PVT. LTD.,SELL,109115,47.61,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,SELL,203336,47.96,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,B K SHAH CO KETAN BHAILAL SHAH,SELL,107854,48.38,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,CPR CAPITAL SERVICES LTD.,SELL,124870,48.82,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,LOTUS GLOBAL INVESTMENTS LIMITED,SELL,110000,44.36,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,PRASHANT JAYANTILAL PATEL,SELL,131147,46.39,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,R.M. SHARE TRADING PVT LTD,SELL,231176,48.27,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,SANJAY BHANWARLAL JAIN,SELL,142878,47.87,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,TASNEEM K. MASTER,SELL,113323,47.91,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,THE SURAT SAFE DEPOSIT VAULT PVT LTD,SELL,147219,48.42,-
10-JUN-2008,RPGLIFE,RPG Life Sciences Limited,TRANSGLOBAL SECURITIES LTD.,SELL,277894,46.95,-
BSE Bulk Deals to Watch - June 10 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
10/6/2008 532981 ANU LABS GOPAL TRADERS B 173000 291.45
10/6/2008 505036 AUTOMO COR G TATA MOTORS LTD B 150000 247.95
10/6/2008 505036 AUTOMO COR G UBS SECURITIES ASIA LTD AC SWISS FINANCE CORP MAURITIUS LTD S 96910 248.00
10/6/2008 505036 AUTOMO COR G BIRLA SUNLIFE TRUSTEE CO PVT LTD AC BIRLA EQUITY PLAN S 50687 248.00
10/6/2008 500031 BAJAJ ELECTR RELIANCE CAPITAL TRUSTEE CO LTD AC REL DIVER POWER SECT FUND B 1347218 400.00
10/6/2008 500031 BAJAJ ELECTR FIDELITY INVESTMENTS MANAGEMENT HONG KONG LIMITED S 1380958 400.01
10/6/2008 532946 BANG CHANDRA FINANCIAL SERVICES PVT. LTD. S 86519 252.69
10/6/2008 524768 EMMESSA BIOT MANAR LEASING AND INV P L B 330000 5.00
10/6/2008 524768 EMMESSA BIOT MANOJ M SHAH S 240000 5.00
10/6/2008 524768 EMMESSA BIOT ARVIND M SHAH S 90000 5.00
10/6/2008 532081 K SERA SERA S V ENTERPRISES B 436074 26.21
10/6/2008 531602 KOFF BR PICT PRAVIN D GALA S 29000 20.75
10/6/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 35000 20.73
10/6/2008 507912 LKP MER FIN. PADMAKSHI FIN .SERV.P.LTD. B 152000 149.84
10/6/2008 507912 LKP MER FIN. GKK CAPITAL MARKETS PRIVATE LI S 300000 149.47
10/6/2008 531996 ODYSSEY CORP SMITA MANOJ TURKHIA S 30000 28.96
10/6/2008 530047 RAI SH REK M NILU SANJAY PODDAR B 100000 108.90
10/6/2008 532884 REFEX REFRIG SANDHYA H JATANIA B 200000 233.30
10/6/2008 532884 REFEX REFRIG HIMAT PARSHOTTAMBHAI JATANIA B 335000 231.50
10/6/2008 532884 REFEX REFRIG SANDHYA H JATANIA S 200000 233.20
10/6/2008 511607 SHLOKA INFO SARAH FAISAL HAWA B 45000 67.99
10/6/2008 511607 SHLOKA INFO PARESH CHANDRAKANT DOSHI S 22899 67.86
10/6/2008 517214 SPICE MOBIL MODI RUBBER LTD S 720163 20.06
10/6/2008 500114 TITAN IND. FIDELITY INVESTMENT MGMT HK LTD AC FID FUND MAURITIUS LTD B 225059 1085.00
10/6/2008 500114 TITAN IND. INDEA CAPITAL PTE LTD S 225000 1085.00
10/6/2008 531249 WELL PACK PA AMI STOCK SHARE BROKERS PLTD S 166429 40.30
Post Session Commentary - June 10 2008
Indian market slipped sharply to conclude with losses. Both Nifty and Sensex plunged to 2008 lows due to heavy selling pressure across the board led by concerns of a possible increase in interest rates. The domestic market started the day on a weak note tracking negative global cues and showed some sign of recovery for a moment during early trade but again lost the momentum to kept on hovering in the negative region through out the session. Further, it carried on to gather the selling pressure to close in red. The BSE Sensex was trading below 15000 mark and NSE Nifty below 4500. From the sectoral front, only pharma and oil & gas indices were in limelight as they witnessed the buying in their baskets while all other stocks closed in red mainly banking, metal, reality and IT stocks remained out of favor. The market breadth was weak as 1,667 stocks closed in red while 964 stocks closed in green.
The BSE Sensex closed lower by 176.85 points at 14,889.25 and NSE Nifty fell by 51.95 points to close at 4,449.80. The BSE Mid Caps and Small Cap closed lower by 66.50 points and 75.38 points at 6,103.83 and 7,341.86 respectively. The BSE Sensex touched intraday high 15,088.03 and intraday low of 14,645.31.
Losers from the BSE are HDFC (4.79%), ONGC (4.74%), HDFC Bank Ltd (4.46%), TCS Ltd (3.89%), JP Associates (3.54%), Infosys Tech (2.89%), Satyam Computer (2.76%), ITC Ltd (2.66%), Reliance Infra (2.59%) and ICICI Bank Ltd (2.47%).
The Banking index fell by 170.99 points to close at 6,862.33 as Canara Bank (6.99%), Federal Bank (5.13%), HDFC Bank Ltd (4.46%), Axis Bank (3.25%), Yes Bank (2.94%), and Andhra Bank (2.76%) closed in negative territory.
The Metal index declined by 123.69 points to close at 15,265.92. Major losers are ShPrecoasted (4.74%), Welspan Gujarat Sr (4.31%), Sterlite Industries (4.22%), Nat Alum Co (2.73%), Jindal Steel (2.05%) and Jindal Saw (1.69%).
The Realty index closed down by 121.61 points at 5,630.61. Losers are Akruti City (5.97%), Pheonix Mill (5.36%), Ansal Infra (5.27%), Purvankara (4.67%), Anant Raj In (3.80%), and Housing Development (3.73%).
The IT Index closed lower by 121.02 points at 4,283.96. Losers are Tech Mahindra (6.99%) along with Mphasis Ltd (3.98%), TCS Ltd (3.89%), Rolta India (3.47%), HCL Tech (3.25%), NIIT Tech (3.24%) and Infosys Tech (2.89%).
The Health Care index closed higher by 93.16 points at 4,411.91. Gainers are Cipla Healthcare (8.09%), Ranbaxy Lab (6.53%), Divi’s Lab (4.76%), Aurobindo Pharma (3.84%), Orchid (3.19%) and Glenmark (3.03%).
The Oil & Gas index ended up by 14.67 points at 9,691.22. Gainers are BPCL (2.24%), HPCL (1.86%), Reliance (1.68%), IOC (0.91%), and Reliance Pet (0.09%).
Sensex erases its lows but sheds 96 points at close
Weak global cues and negative breadth in yesterday's trades, led the market open at a lower today. The Sensex was down 86 points at the open and remained subdued, as investors booked profits after the recent gains. IT, banking, consumer durables and reality stocks took the major beating, but healthcare stocks bucked the trend on gains in Cadila Healthcare and Ranbaxy Laboratories. The index faltered under selling pressure by afternoon and slipped to the day's low of 14,645. While the market fluctuated sharply thereafter, firm bullish sentiment and strong buying in heavyweights and health care stocks in the late trades helped the Sensex erase most of its losses. The Sensex finally ended the session by shedding 1.17% or 177 points at 14,889. Nifty slipped by 51 points at 4,450.
The market breadth was negative. Of the 2,698 stocks traded on the BSE, 1,658 stocks declined, 971 stocks advanced and 69 stocks ended unchanged. Most of the sectoral indices ended in red. The BSE IT index dropped 2.75% at 4,284 followed by the BSE Bankex index (down 2.43% at 6,740), the BSE CD index (down 2.37% at 3,841) and the BSE Realty index (down 2.11% at 5,631). However, the BSE HC index gained 2.16% at 4,412 and the BSE Oil & Gas index (up 0.15% at 9.691).
Heavyweights led the fall in the Sensex. HDFC slipped by 4.79% at Rs2,064, ONGC slumped by 4.74% at Rs872.60, HDFC Bank shed 4.46% at Rs1,118, Tata Consultancy Services lost 3.89% at Rs867.20, Jaiprakash Associates was down 3.54% at Rs173.10 and Infosys tumbled by 2.89% at Rs1,795.35. Among the gainers Ranbaxy Laboratories jumped 6.53% at Rs560.75, Cipla gained 2.13% at Rs211.05, Reliance Industries soared 1.68% at Rs2,199, Hindustan Unilever rose by 1.57% at Rs234.40 and Maruti Suzuki India was up 0.76% at Rs741.50, while ACC, BHEL, Hindalco and Ambuja Cements ended with modest gains.
Over 1.85 crore IFCI shares changed hands on the BSE followed by Reliance Petroleum(1.36 crore shares), Ispat Industries (1.34 crore shares), Reliance Natural Resources (1.31 crore shares) and Spice Telecommunications (1.00 crore shares).
Reliance Industries registered a turnover of Rs281 crore on the BSE followed by Reliance Capital (Rs261 crore), Reliance Petroleum (Rs231 crore), Ranbaxy Laboratories (Rs213 crore) and Anu’s Laboratories (Rs167 crore).
Sensex at 3-month closing low
The market recovered some of the lost ground in late trade after the barometer index BSE Sensex and the S&P CNX Nifty had tumbled to its lowest in 2008 in mid-afternoon trade. Weakness in global markets weighed on the domestic bourses. The market breadth was weak. Healthcare stocks and shares of public sector oil marketing firms rose even as IT, realty and banking stocks declined.
The 30-share BSE Sensex lost 176.85 points or 1.17% at 14,889.25, its lowest close since mid-March 2008. At the day’s low of 14,645.31 the Sensex lost 420.79 points in mid-afternoon trade, falling below its previous year 2008 low of 14,677.24 hit 18 March 2008.
Earlier, after opening on a subdued note on weak global cues, the market had recovered to trade in green for a brief period. At the day’s high of 15,088.03 Sensex gained 21.93 points in early trade.
The broader based S&P CNX Nifty was down 41.25 points or 1.14% at 4,449.80. Nifty hit new year 2008 low of 4369.80 today. Nifty June 2008 futures were at 4453, at a premium of 3.20 points as compared to spot closing of 4449.80.
The BSE clocked a turnover of Rs 5,265 crore today as compared to a turnover of Rs 5,053.75 crore on Monday, 9 June 2008. NSE's futures & options (F&O) segment turnover was Rs 53,893.30 crore, which was lower than Rs 58,333.52 crore on Monday, 9 June 2008.
The market breadth was weak on BSE with 964 shares advancing as compared to 1,667 that declined. 68 remained unchanged. Among the 30 stocks from Sensex pack, 21 were trading in red.
As per the provisional figures on NSE, Foreign institutional investors (FII)s sold shares worth Rs 910.16 crore today, 10 June 2008 while domestic funds bought shares worth Rs 296.39 crore.
The BSE Mid-Cap index fell 1.08% to 6,103.83 and BSE Small-Cap index fell 1.02% to 7,341.16.
All the sectoral indices on BSE ended with losses except the BSE HealthCare index. BSE IT index (down 2.75% to 4,283.96), BSE Bankex (down 2.43% at 6,862.33), BSE Consumer Durables index (down 2.37% to 3,840.96), The BSE Realty index (down 2.11% at 5,630.61), BSE TecK index (down 1.94% to 3,323.17), BSE FMCG index (down 1.58% to 2,276.59), BSE PSU index (down 1.23% to 6,390.28) underperformed Sensex.
BSE HealthCare index (up 2.16% at 4,411.91), BSE Oil & Gas index (up 0.15% to 9,691.22), The BSE Auto (down 0.1% at 4,119.58), BSE Capital Goods (down 0.16% at 11,617.57), BSE Power index (down 0.47% to 2,606.96), BSE Metal index (down 0.8% to 15,265.92), BSE FMCG index (down 1.58% to 2,276.59), outperformed the Sensex.
Bharat Heavy Electricals (up 0.54% to Rs 1,382.05), Reliance Industries (RIL) (up 1.68% to Rs 2,199.40), Ambuja Cements (up 0.43% to Rs 82.30) and ACC (up 0.55% to Rs 616.40) edged higher from the Sensex pack.
ONGC (down 4.74% to Rs 831.25), HDFC (down 4.79% to Rs 2,101), Jaiprakash Associates (down 3.54% to Rs 177.15), Reliance Infrastructure (down 2.59% to Rs 1,011.60), Tata Motors (down 0.81% to Rs 512.90) edged lower from the Sensex pack.
Consumer durables stocks declined. Rajesh Exports (down 6.53% to Rs 70.85), Titan Industries (down 3.73% to Rs 1,088), Blue Star (down 3.26% to Rs 390) and Gitanjali Gems (down 1.13% to Rs 266) edged lower.
Banking stocks fell extending their recent sharp losses on concerns of further policy tightening of the monetary policy by the Reserve Bank of India to rein in inflation which is at its highest level in nearly four years. HDFC Bank (4.96% to Rs 1,130.95), State Bank of India (down 1.06% to Rs 1,279.10) and ICICI Bank (down 2.47% to Rs 731.60) edged lower.
Realty stocks extended yesterday’s huge losses. Indiabulls Real Estate (down 1.82% to Rs 391.15), Unitech (down 3.03% to Rs 179.20) and DLF (down 0.35% to Rs 479.85) edged lower.
Software services companies, which get more than half their revenue from the United States, fell on signs the US economy was heading for stagflation. BSE IT index was the top loser from the sectoral indices on BSE. It was down 2.75% to 4,283.96. Infosys (down 2.89% to Rs 1,849.10), Tata Consultancy Services (down 3.89% to Rs 880.05), Satyam Computer Services (down 2.76% to Rs 477.90), and Wipro (down 1.46% to Rs 473.55) edged lower.
Healthcare stocks rose. Ranbaxy Laboratories (up 6.53% to Rs 560.75), Cipla (up 2.13% to Rs 211.05), Dr. Reddy’s Laboratories (up 0.54% to Rs 696.50) edged higher.
Shares of oil state-run oil marketing firms rose today after witnessing heavy battering over the past few days. HPCL (up 1.86% to Rs 196.90), BPCL (up 2.24% to Rs 284.65) and Indian Oil Corporation (up 0.91% to Rs 366.55) edged higher.
IFCI clocked the highest volume of 1.85 crore shares on BSE. Reliance Petroleum (1.36 crore shares), Ispat Industries (1.34 crore shares), Reliance Natural Resources (1.31 crore shares) and Spice Communications (1 crore shares) were other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 281.98 crore on BSE. Reliance Capital (Rs 261.73 crore), Reliance Petroleum (Rs 23.74 crore), Ranbaxy Laboratories ( Rs 213.44 crore) and Anu’s Laboratories (Rs 167.13 crore) were other turnover toppers in that order.
European markets were weak. Key benchmark indices in France, Germany and UK were down by between 0.37% to 0.59%.
Stocks dropped in Asia after US Federal Reserve Chairman Ben Bernanke's warning on inflation on Monday, 9 June 208, fanned expectations of higher US interest rates later this year. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan were down by between 1.49% to 7.73%.
The Dow staged a modest rebound on Monday from Friday's nearly 400-point drop, as concerns about US consumer spending and the troubled US housing market were eased by better-than-expected sales figures from McDonald's Corp and a surprising gain in pending home sales. The broader market was little changed, with a drop of more than $4 in the price of oil helping fuel-dependent sectors such as manufacturers, mitigating sharp losses in the financial and technology sectors. The Dow Jones industrial average was up 70.51 points, or 0.58%, to end at 12,280.32. The Standard & Poor's 500 Index was up 1.08 points, or 0.08%, at 1,361.76. But the Nasdaq Composite Index was down 15.10 points, or 0.61%, at 2,459.46.
A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 2984.20 core in the first few days of this month, till 6 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 6 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)’s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
According to a latest monthly June 2008 strategy report by HSBC Global Research, a possibility of Left parties withdrawing support to the government at the centre over the fuel price hike issue, cannot be ruled out. In such an environment with prospects of mid-term polls, the stock market is likely to remain nervous, HSBC says. Parliamentary elections are due in India in May 2009. HSBC’s 2008 year-end (calendar year) target for Sensex is 17,500, compared to current Sensex level of 15,066.10.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Market may also be keeping a watch on the industrial production numbers for April 2008, which the government will unveil on Thursday, 12 June 2008, which will give a cue on the extent of slowdown in the Indian economy caused by high interest rates.
The BSE Sensex may fall to a 10-month low of around 13,000 points by end-2008, as the Reserve Bank of India may raise interest rates to check inflation due to record oil prices, Credit Suisse said on Monday, 9 June 2008. "The market is still not pricing in the much lower earnings growth being forecast by corporates and banks," Nilesh Jasani, head of research at the Indian unit of the Swiss bank told reporters at a briefing on Monday, 9 June 2008. Uncertainty ahead of national elections will also weigh on the minds of investors, Jasani said.
Grey Market - Lotus Eye Care, Sejal Architectural
Niraj Cement 190 Discount
Bafna Pharmaceutical 40 7 to 8
Avon Weighing 10 3 to 4
Sejal Architectural Glass Ltd. 105 to 115 18 to 20
First Winners Ind. Ltd. 120 to 130 12 to 14
Archid Ply Ind. 70 to 80 8 to 10
Lotus Eye Care Hospital 38 to 42 4 to 6
Market to remain nervous
Nervousness in the market is likely to continue after the Sensex reported losses in yesterday's trades. Weakness in the global indices could make the investors jittery from taking any fresh position. Among the key local indices, the Nifty could decline to 4448 or 4411 on the downside while on the upside there is a near term resistance at 4536. The Sensex has a likely support at 14800 and may face resistance at 15250.
US indices ended mixed on Monday. While the Dow Jones gained by 71 points to close at 12280, the Nasdaq ended 15 point lower at 2459.
Among the eleven Indian ADRs only Dr Reddy ended in the green on the US bourses. Patni Computer & MTNL fell sharply and tumbled above 3% each. While Tata Motors, ICICI Bank, VSNL, Infosys, Wipro, HDFC Bank and Rediff computer declined over 1-2% each and rest ended with the marginal losses.
The Nymex light crude oil for July delivery slipped by $4.19 to close at $134.35. In the commodity space, the Comex gold for August series lost 90 cents to settle at $898.10 a troy ounce.
Market may extend losses
The market may extend Monday (9 June 2008)’s sharp fall on negative cues from Asian markets. Stocks dropped in Asia after US Federal Reserve Chairman Ben Bernanke's warning on inflation on Monday, 9 June 208, fanned expectations of higher US interest rates later this year. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan were down by between 0.77% to 5.67%.
A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 2984.20 core in the first few days of this month, till 6 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)’s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
According to a latest monthly June 2008 strategy report by HSBC Global Research, a possibility of Left parties withdrawing support to the government at the centre over the fuel price hike issue, cannot be ruled out. In such an environment with prospects of mid-term polls, the stock market is likely to remain nervous, HSBC says. Parliamentary elections are due in India in May 2009. HSBC’s 2008 year-end (calendar year) target for Sensex is 17,500, compared to current Sensex level of 15,066.10.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Market may will also be keeping a watch on the industrial production numbers for April 2008, which the government will unveil on Thursday, 12 June 2008, which will give a cue on the extent of slowdown in the Indian economy caused by high interest rates.
US markets end mixed
After a day of choppy trading, US stocks ended mixed but mostly higher today, Monday, 09 June, 2008. Oil prices dropping by more than $4 and a better than expected housing report were the main reasons behind today’s rise. But Nasdaq was the only index to end in the red. After last week’s steep decline in the market, traders heaved a sigh of relief after today’s trading. However, weakness in tech and financials limited the broader market's advance.
The Dow Jones industrial Average ended the day with a gain of 70 points at 12,280. The Nasdaq Composite Index, finished lower by 15 points at 2,459. S&P 500 finished higher by 1 points at 1,361.
As per National Association of Realtors, April pending home sales unexpectedly rose 6.3% on a seasonally adjusted annual rate. Market expected sales to fall 0.4%. Market welcomed this news in a time when housing has been always playing the spoilsport.
Dow component McDonald's was one of the Dow winners today after it said that its global same-store sales rose 7.7% in May. International comparable sales rose 16.0%, or 9.1% in constant currencies. U.S. comparable sales rose 4.2%.
Lehman Brothers weighed on the financial sector today after a second quarter earnings preannouncement from the company topped headlines. The struggling Wall Street firm reported that it expects a massive $2.8 billion second quarter loss and plans to raise $6.0 billion in new capital in common and preferred stock offerings.
The tech sector faced selling pressure as shares of Apple and Google fell. Apple shares fell 2.2%, after CEO Steve Jobs unveiled a new version of the iPhone wireless handset at the firm's annual developer conference in San Francisco.
Profit booking and some comments from some OPEC minister led crude prices slipping by more than $4 today. Price slipped after Saudi Arabia's oil minister, Ali al-Naimi, called for a meeting of oil producing and consuming nations to discuss how to deal with record prices. Crude-oil futures for light sweet crude for July delivery today closed at $134.35/barrel (lower by $4.19/barrel or 3.1%) on the New York Mercantile Exchange.
Oil prices had shot higher by almost $11 a barrel on Friday, 06 June, 2008 scoring their biggest one-day gain in dollar terms as talk about a potential Israeli attack on Iran combined with a slide in the U.S. dollar. Last Friday, prices closed at $138.5. That was an all-time closing high.
Saudi Arabia reportedly said today that it had increased production this month and has told all the oil companies it deals with that it's ready to provide them with additional supplies, if needed.
At the currency markets on Monday, the dollar rose against the euro for the first time in three sessions as U.S. policy makers indicated they are concerned about the currency's 7% drop this year.
Trading volumes were light with 1.35 billion shares trading on the New York Stock Exchange, where declining issues topped decliners by a ratio of 2 to 1. On the Nasdaq stock market, 924 million shares traded, with decliners topping gainers by 19 to 9.
For tomorrow, the economic calendar focuses the April trade balance report.
Today's Pick - Balaji Telfilms
We recommend a buy in Balaji Telefilms from a short-term perspective. The stock’s intermediate-term downtrend from its November 2007 high of Rs 388 got arrested at around Rs 165 in mid April 2008. Since then, the stock was on a sideways consolidation phase in a narrow range between Rs 165 and Rs 180 for more than a month. However, in late May, the stock broke out of the sideways range as well as the 21 and 50-day moving averages conclusively (showing signs of bullishness). The stock is currently trading well above the 21 and 50-day moving averages. The daily momentum indicator is likely to re-enter the bullish zone from the neutral region. The moving average convergence and divergence has displayed a positive divergence and is featuring in the positive territory. Our short-term forecast for the stock is bullish. We expect the stock to move up until it hits our price target of Rs 222 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining the stop-loss at Rs 185 level.
via BL
Morning Call - June 10 2008
Market Grape Wine :
Out House :
Markets at a support of 14786 & 14898 resistance at 15225 & 15456 levels .
Buy : NTPC
Buy : LT
Buy : RPL
Buy : RelCap
Buy : Praj
Buy : HLL & ITC
Buy : Tisco
Dark Horse : Tisco , Cairn , RPL , HLL , Relcap , Wipro & LT
Pre Session Commentary - June 10 2008
The Indian Market is expected to have negative opening on the back of unfavorable cues from the global markets as Asian markets are trading lower and US market ended mixed. On Monday, the Indian market closed with huge losses due to the heavy selling pressure. The market opened with the extremely negative attitude on the back of weak global cues and continued the same till end of the trading. BSE Sensex touched below 15000 mark and NSE Nifty below 4500, during early trading hours. It remained in negative territory throughout the trading session and closed in deep red. From the sectoral front, only Pharma index ended in positive territory while reality, capital goods, oil & gas and banking stocks were the major losers. The BSE Sensex closed lower by 506.08 points at 15,066.10 and NSE Nifty fell by 126.85 points to close at 4,500.95. We expect that the market may remain volatile during the trading session.
On Monday, the US market closed mixed due to the better than expected homes sales data. It started on strong note but ended mixed on Lehman Brothers statement that it had planned to raise $6 billion after a second-quarter net loss estimated at $2.8 billion.
The Dow Jones Industrial Average (DJIA) closed higher by 70.51 points at 12,280.32 along with S&P 500 grew by 1.08 points to close at 1,361.76 while NASDAQ plunged by 15.10 points to close at 2,459.46.
Indian ADRS ended low. In technology sector, Wipro was down by (1.46%) along with Infosys by (1.18%), Satyam by (0.96%) and Patni Computers by (0.51%). In banking sector, ICICI bank and HDFC bank decreased by (2.20%) and (1.26%) respectively. In telecommunication sector, MTNL and Tata Communication dropped by (3.20%) and (2.57%). Sterlite industries reduced by (1.64%).
Today the major stock markets in Asia are trading lower. Hong Kong''s Hang Seng is trading down by 716.36 points at 23,685.82 along with Taiwan Weighted trading dropped by 113.88 points at 8,474.08 and Japan’s Nikkei trading at 14,173.09 down by 8.29 points.
The FIIs on Monday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs2,887.30 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,580.30 Crore and gross debt sold stood at Rs15.00 Crore. Therefore, the net investment of equity reported was Rs307.00 Crore and net debt was (Rs15.00) Crore.
Today, Nifty has support at 4,406 and resistance at 4,583 and BSE Sensex has support at 14,756 and resistance at 15,392.
Trading Calls - June 10 2008
Nifty (4501) Sup 4440 Res 4575
Sell BHEL (1375) SL 1395
Target 1330, 1320
Sell IVRCL Infra (361) SL 366 Target 351, 348
Buy Crompton Greaves (243) SL 238 Target 253, 256
Buy Ranbaxy (525) SL 520
Target 535, 540
Buy Nicolas (376) SL 371
Target 386, 390
On the fence, or defence!
Fences are made for those who cannot fly.
Six months ago one would have said bulls can fly. However, since then wings have been clipped and now bulls are more or less on bended knees. After the expected mayhem, the bulls may manage to pull off a slight bounce today. Even if they run instead of walking, the bulls won’t have the stamina to push themselves longer.
We've repeatedly talked about how the macro-economic environment has turned weaker. Interest rates still quite high, inflation is at 45-month's peak, rupee is falling and cost pressures are increasing for India Inc. What's worse, the foreign funds seem to have deserted Indian equities for the year at least. Technical and derivative signals also point to more weakness in the coming days.
But for the day, we may see some bounce back after yesterday's carnage. Stick to the defensive sectors like IT (given circumstance it is defensive for time being), Pharma and FMCG and stay away from the risky ones like Real Estate, Infrastructure and Capital Goods. Of course you can argue that the beaten down ones will recover fastest. But we are worried it may take longer. So be on the defensive.
Also, small- and mid-cap stocks could be risky, especially now. On the other hand, quite a few large caps have fallen to attractive levels. Long-term buying can be considered in these stocks.
US stocks finished mixed, while Europe was pretty much flat. Key emerging markets were still in the red. Most of the weakness this morning in Asia is coming from the markets that were shut yesterday.
Meanwhile, Chinese stocks are down as the central bank has hiked the reserve ratio for banks by a whopping 100 basis points to contain inflation. Back home too, there are talks of a fresh monetary tightening from the RBI due to the anticipated flare-up in inflation from the recently announced hike in retail fuel prices. Oil is currently hovering around $135 per barrel and is forecast to climb to $150 as the US summer approaches before it cools down (if at all it does).
FIIs were net sellers of Rs13.45bn (provisional) in the cash segment on Monday while the local institutions poured in Rs10.3bn. In the F&O segment, foreign funds were net buyers at Rs3.69bn. On Friday, FIIs were net buyers of Rs3.07bn in the cash segment. With this, they have pulled out a net of $4.5bn from the Indian market this year so far.
ABG Shipyard, Asian Hotels, Evinix Accessories, Gujarat Industrial Power, Gujarat Fluorochemicals, NALCO, Sangam India and Zandu Pharma will announce their results today.
Asian stocks are mostly down this morning, driving a regional benchmark index to a two-month low. Australian and South Korean stocks slumped on concern that a slowing US economy and rising energy costs will erode earnings.
James Hardie Industries NV, the biggest seller of home siding in the US, declined in Sydney, where the market was closed yesterday. Macquarie, Australia's biggest securities firm, plunged on concern that credit-market losses will widen after Lehman Brothers reported a quarterly loss.
The MSCI Asia Pacific Index lost 0.5% to 146.54 at 10:28 a.m. in Tokyo, the lowest since April 18. Japan's Nikkei 225 Stock Average was little changed.
Australia's S&P/ASX 200 Index lost 2.2%, set for its biggest decline since March 20. The Australian dollar fell the most in 11 weeks after US Treasury Secretary Henry Paulson said he would never rule out currency intervention.
China's stocks tumbled after the central bank ordered lenders to increase reserves for a fifth time this year. China's CSI 300 Index dropped 4.6%.
In addition to Australia, Hong Kong, China and the Philippines were closed yesterday for holidays, when MSCI's Asian gauge lost 2% after crude oil surged more than $10 a barrel on June 6 and US unemployment jumped the most since 1986.
US stock indices closed mixed on Monday with the Dow Jones advancing marginally and the Nasdaq declining slightly in a choppy session. Investors considered Lehman Brothers' big loss, Apple's new iPhone announcement and some cautious talk from Fed officials.
A steep drop in oil prices and upbeat housing data provided some relief to investors. Crude oil retreated more than $4 a barrel, but failed to reassure investors worried about rising inflation and slowing growth.
The Nasdaq Composite Index lost 15 points, or 0.6%, to 2,459.46. The S&P 500 ended virtually flat at 1,361.76. The Dow Jones Industrial Average climbed 70 points, or 0.6%, to 12,280.32.
The Dow kept dipping in and out of negative territory through the day and backed off from a morning high of 12,331. The bounce remained very timid relative to the Dow's nearly 400-point drop on Friday.
Market breadth was negative. About eight stocks decreased for every five that gained.
Financial shares weighed on the market on concerns following the capital raising announcement by Lehman Brothers. Technology shares were under pressure ahead of a quarterly update from chipmaker Texas Instruments.
Shares of Lehman Brothers dropped 8.7% after the Wall Street investment bank said it would raise $6bn in a stock offering. Lehman Brothers also expects to report a sizable second-quarter loss of $2.8bn, or $5.14 a share.
Apple shares fell 2.2% after CEO Steve Jobs unveiled a new version of the iPhone wireless handset at the firm's annual developer conference in San Francisco.
Yahoo rose 0.5% after billionaire investor Carl Icahn fired another salvo in a bid to take control of the web giant's board.
In a sign that the US housing market may gain some strength in coming months, an index of sales contracts on previously owned homes rose 6.3% in April from the prior month, the National Association of Realtors reported.
A couple of Fed officials issued comments adding to concerns that the central bank may have to raise interest rates later this year to counter rising inflation. New York Fed President Timothy Geithner gave a speech to that effect, as did Dallas Fed President Richard Fisher.
In other news, presumptive Democratic presidential nominee Barack Obama has called for Congress to inject another $50bn into the economy to lift the economic gloom.
The national average price for a gallon of regular unleaded gas rose to a record $4.023 from a record $ 4.005 the previous day, AAA reported. Oil prices slumped, with US light crude oil for July delivery losing $4.19 to settle at $134.35 a barrel on the New York Mercantile Exchange.
The dollar gained versus the euro and yen, recovering after its recent slide. Treasury prices slumped, raising the yield on the 10-year note to 3.99% from 3.91% late on Friday. COMEX gold for August delivery fell 90 cents to $898.10 an ounce.
European shares finished relatively flat as strong gains for oil companies and utility firms offset fresh worries about the health of the banking sector. The pan-European Dow Jones Stoxx 600 index ended the day off 1.58 points, or 0.5%, to 308.71.
Germany's DAX 30 gaining 0.2%, to close at 6,815.63, while the French CAC-40 rose 0.1%, to 4,799.38 and the UK's FTSE 100 slipped 0.5% to 5,877.60.
In the emerging markets, the Bovespa in Brazil was down 0.7% at 69,281 while the IPC index in Mexico too lost 0.7% to 30,933. The RTS index in Russia rose 0.6% to 2357 while the ISE National 30 index in Turkey dropped 1.2% to 47,552.
Some bounce back likely
Weak global cues, coupled with heavy selling pressure in the index frontrunners like Reliance Industries, IT bellwether, Infosys, HDFC, ONGC and ICICI Bank dragged the benchmark Sensex to slip below the 15k mark during the day.
Most of the stocks badly beaten down were from the realty sector. The BSE Realty Index was down 7.05% against a 3.25% fall in the benchmark Sensex. Realty major DLF Ltd and Omaxe slipped below their public issue price. The two companies had come out with their IPO in 2007. DLF had its issue price at Rs525 per share and Omaxe at Rs310 per share.
The Nifty also dropped below the 4,500mark. However, bulls managed to partially recover early losses led by the gains in select Pharma and the Metal stocks. However, in the last hour of the trading session, bulls slightly gained momentum lifting the Nifty to close above the 4,500mark recovering nearly 100 points from days low hits new 2008 low during intra-day.
Among the 30-scrips of Sensex, 27 stocks ended in red and only 3 stocks ended in green. Finally, the BSE benchmark Sensex lost 506 points to close at 15,066 and the Nifty index lost 126 points to close at 4,500.
Shares of Spice Communication ended higher by 2.5% at Rs53 following media reports that Telekom Malaysia would hike stake to 51% in the company. There were also reports stating that Idea would pick up stake in Spice Communication and would eventually merge the company with Idea. The scrip touched an intra-day high of Rs54 and a low of Rs49 and recorded volumes of over 39,00,000 shares on NSE.
HT Media ended with positive gains and was up by a percent to Rs126 after one of India's largest media company, and the German media group, Hubert Burda, announced it formed a joint venture to tap growing media platforms in India and Asia.
The joint venture leverages HT Media's world class expertise in printing and publishing, and Burda’s large and global multimedia operation, combining it with India's unique competitive advantage in several current and new business platforms. The scrip touched an intra-day high of Rs127 and a low of Rs120 and recorded volumes of over 4,000 shares on NSE.
Great Offshore dropped by over 6.5% to Rs634. The company announced that the Board of Directors decided to propose to the stakeholders of the overseas company to acquire one of the two rigs under construction, by the overseas company. The scrip touched an intra-day high of Rs675 and a low of Rs620 and recorded volumes of over 22,000 shares on NSE.
BHEL was down by over 3% to Rs1376. The company announced that it secured Rs35.88bn contract. The scrip touched an intra-day high of Rs1395 and a low of Rs1325 and recorded volumes of over 6,00,000 shares on NSE.
Cadila Healthcare slipped 2% to Rs289. The company announced that its unit acquired 70% stake in Simayla Pharmaceuticals, South Africa. The scrip touched an intra-day high of Rs291 and a low of Rs274 and recorded volumes of over 4,000 shares on NSE.
Shares of Reliance Industries was badly beaten up, the scrip below its previous low of Rs2120. The stock was down by over 3.5% trading at Rs2163 touching an intra-day high of Rs2218 and a low of Rs2112 and recorded volumes of over 17,00,000 shares on NSE.
Sadbhav Engineering dropped by 4.5% to Rs868 after the company announced that it entered into an agreement to acquire 74% stake in Ocean Bright Corporation Ltd a company incorporated in Hong Kong through its 100% subsidiary- Sadbhav Natural Resources Pvt. Ltd. The scrip touched an intra-day high of Rs920 and a low of Rs735 and recorded volumes of over 3,000 shares on NSE.
Suzlon Energy dropped by over 6.5% to Rs261. Suzlon Wind Energy Corporation, USA, a step-down wholly owned subsidiary of Suzlon Energy Ltd had signed a contract for an aggregate of 300 units of S88-2.1 MW turbines with Edison Mission Energy of Irvine, California ("EME").
The two phase contract called for delivery of 150 units of the turbines in calendar year 2008 and 150 units of the turbines in calendar year 2009, with an option to EME to elect not to purchase the 150 units due for delivery in calendar year 2009. The scrip touched an intra-day high of Rs274 and a low of Rs250 and has recorded volumes of over 31,00,000 shares on NSE.
Sahara India Finance was frozen at 5% lower circuit to Rs160.70. Reports stated that Supreme Court directed Sahara India Finance to appear before RBI on June 12. The scrip touched an intra-day high of Rs160.70 and a low of Rs160.70 and recorded volumes of over 8,000 shares on NSE.
Era Infra Engineering ended 4.7% lower to close at Rs579. The company announced that through their construction & contracts division it bagged a contract worth Rs852mn from Mumbai Railway Vikas Corporation Ltd. for the construction of EMU Maintenance Car Shed between Nallasopara and Virar stations of Western Railway through International Competitive Bidding (ICB). The scrip touched an intra-day high of Rs579 and a low of Rs555 and recorded volumes of over 36,000 shares on NSE.Corporate News
Idea cellular to buy out 40.8% BK Modi’s stake in Spice Communication for Rs22bn. (ET)
TCS hedges US$1.5bn to safeguard it from Rupee fluctuations. (BS)
UB group to offer stake in airline business to raise funds. (BL)
ONGC may not accept Gazprom’s offer to pick up 50% in its (Gazprom’s) shallow water exploration asset in the North Eastern coast off Orissa. (BL)
Educomp Solutions has secured contracts from 395 schools under the ICT segment. (BL)
M&M to capitalise on the recent acquisition of the US$12mn Italian two-wheeler design company, made by its component arm Systech. (BL)
Paramount Airways has joined the race for buying Spicejet. (ET)
Great Offshore drops plans to acquire two rigs; the company is now planning to buy only one rig. (ET)
HT Media has signed a JV with German media group Hubert Burda. It will set up a printing facility near its own Greater Noida facility. (BL)
Ashok Leyland to borrow Rs10bn in two equal parts to raise its India capacity. (Mint)
Moser Baer plans to set up Rs20bn manufacturing facility near Chennai to make photovoltaic products. (BL)
Aditya Birla Group may acquire 51% stake in Apollo Sindhoori Capital, a broking firm promoted by Apollo Hospital Group. (ET)
SC directs Sahara India Financial Corporation to approach RBI on Thursday to convince it that its financial activities are in order. (BS)
Zydus Cadila acquires majority stake in South Africa based Simalaya Pharmaceuticals. (BS)
BSNL reduces STD rates for its fixed line and cellular subscribers by up to 50%. (BL)
Gujarat High Court has stayed on NPPA order to cut prices of Cadila's drug Envas. (ET)
Cognizant Techology has acquired Strategic Vision Consulting, Inc (SVC), a management and technology consulting firm in US. (BL)
Pipavav Shipyard plans to build offshore patrol vessels for the Indian Navy. (Mint)
Integreon is likely to acquire three companies for US$100mn in next two-three years. (ET)
Economic News
The Government may revise gas pricing formula by raising the cap for gas and crude oil prices at KG basin. (ET)
Finance Minister says the direct tax collection target will be hiked to Rs4 trillion for the current fiscal year. (ET)
According to the Nasscom, the Indian IT industry to witness a 3-4% dip in growth in FY09 as against a 28% growth it achieved in FY08. (BS)
SEBI has proposed to expedite the process of disclosures made by listed companies. (BS)
SEBI proposes to shrink time period for disclosure from 9 days to 2 days. (BL)
The Centre is mulling over a fresh proposal for decontrol of the sugar industry. (BL)
The Government to enforce corporate governance norms in the Navratna Central Public Sector Enterprises CPSEs. (BS)
Steel prices in the spot markets of Delhi, Mumbai and Chennai have gone up during the first week of June. (BL)
Bullion metals give up earlier gains
Gold prices end marginally lower tracking the course of crude prices
With dropping crude price, bullion metal prices too tracked the course accordingly and ended marginally lower for the day, Monday, 9 June, 2008. In fact it was trading higher earlier in the day but at the end, it gave up its gains going into close. Strong dollar led to yellow metal paring gains. Weakness in oil also leads to dull investment demand for gold, which is often used as a hedge against inflation. Gold climbed earlier on concern tensions between Iran and Israel will escalate, enhancing the appeal of the metal as an investment haven.
Comex Gold for August delivery rose $0.90 (0.1%) to close at $898.1 ounce on the New York Mercantile Exchange. Earlier in the day, it rose to $912.5 and fell to a low of $883.7. It was gold’s highest one day gain in almost four months. Last week, gold prices ended higher by 0.8%. Last month, in May, it ended with a gain of higher by $22.5 (2.5%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
This year, gold prices have gained 7.2% till date this year against a 7% drop for the dollar against the euro. Before May, for April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
On Friday, Comex silver futures for July delivery fell 22 cents (1.3%) to $17.21 an ounce. Silver has gained 15.7% in 2008 till date. It finished 3.5% higher for the week.
Silver prices ended the month of May 2008 with a gain of 2.7%. For April, it closed lower by 5.5%. Silver had gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
At the currency markets on Monday, the dollar rose against the euro for the first time in three sessions as U.S. policy makers indicated they are concerned about the currency's 7% drop this year.
In the energy market today, crude oil fell more than $4 a barrel in New York after Saudi Arabia's oil minister, Ali al-Naimi, called for a meeting of oil producing and consuming nations to discuss how to deal with record prices. The price of crude, which also helped fuel gold's rise last week, declined $4.19 to $134.35 a barrel on the Nymex.
Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.
Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for August delivery closed lower by Rs 116 (0.92%) at Rs 12,430 per 10 grams. Prices rose to a high of Rs 12,628 per 10 grams and fell to a low of Rs 12,386 per 10 grams during the day’s trading.
At the MCX, silver prices for July delivery closed Rs 506 (2.04%) lower at Rs 24,177/Kg. Prices opened at Rs 24,730/kg and fell to a low of Rs 24,104/Kg during the day’s trading.
Crude prices drop by $4
Prices give up a part of their last week’s gains as minister speaks
Profit booking and some comments from some OPEC minister led crude prices slipping by more than $4 today, Monday, 09 June, 2008. Price slipped after Saudi Arabia's oil minister, Ali al-Naimi, called for a meeting of oil producing and consuming nations to discuss how to deal with record prices. Oil prices had shot higher by almost $11 a barrel on Friday, 06 June, 2008 scoring their biggest one-day gain in dollar terms as talk about a potential Israeli attack on Iran combined with a slide in the U.S. dollar.
Crude-oil futures for light sweet crude for July delivery today closed at $134.35/barrel (lower by $4.19/barrel or 3.1%) on the New York Mercantile Exchange. Last Friday, prices closed at $138.5. That was an all-time closing high.
Last week, crude prices closed higher by 8.8%. For the year, crude is up by 38% till date. Prices are 101% higher on a yearly basis. .
Saudi Arabia reportedly said today that it had increased production this month and has told all the oil companies it deals with that it's ready to provide them with additional supplies, if needed.
At the currency markets on Monday, the dollar rose against the euro for the first time in three sessions as U.S. policy makers indicated they are concerned about the currency's 7% drop this year.
Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Natural gas drops with crude
Brent crude oil for June settlement today fell $3.78 (2.8%) to $133.91 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Natural gas in New York fell amid speculation cooler weather will reduce demand and as crude oil declined more than $2 after Saudi Arabia's oil minister called for a meeting to discuss prices. Natural gas for July delivery fell 8.9 cents (0.7%) to settle at $12.604 per million British thermal units.
Against this backdrop, July reformulated gasoline fell 15.6 cents, or 4.4%, to close at $3.394 a gallon and July heating oil sank 9.3 cents to end at $3.877 a gallon.
As per AAA, pump prices in the U.S. passed $4 a gallon for the first time over the weekend. Regular gasoline, averaged nationwide, rose 1.8 cents to a record $4.023 a gallon.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
At the MCX, crude oil for June delivery closed at Rs 5,823/barrel, lower by Rs 122 (2.05%) against previous day’s close. Natural gas for June delivery closed at Rs 540.9/mmbtu, lower by Rs 4.9/mmbtu (0.9%).
Subscribe to:
Posts (Atom)