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Wednesday, June 25, 2008
NSE Bulk Deals to Watch - June 25 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
25-JUN-2008,ALOKTEXT,Alok Industries Limited,CHANDARANA INTERMEDIARIES BROKERS P. LTD,BUY,250,48.35,-
25-JUN-2008,GWALCHEM,Gwalior Chemical Industri,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,131000,92.07,-
25-JUN-2008,RANEENGINE,Rane Engine Valve Limited,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,BUY,28158,141.55,-
25-JUN-2008,RANEENGINE,Rane Engine Valve Limited,MANSUKH SECURITIES & FINANCE LTD,BUY,49760,139.86,-
25-JUN-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,154147,140.73,-
25-JUN-2008,SELMCL,SEL Manufacturing Company,HARDIK M MITHANI,BUY,102262,585.93,-
25-JUN-2008,SIMPLEXINF,Simplex Infrastructures L,HSBC INVESTMENTS (HK) LTD A/C HGIF INDIA EQUITY FUND,BUY,998500,470.00,-
25-JUN-2008,ALOKTEXT,Alok Industries Limited,CHANDARANA INTERMEDIARIES BROKERS P. LTD,SELL,1000250,48.23,-
25-JUN-2008,POCHIRAJU,Pochiraju Industries Limi,OM ARORA,SELL,135460,18.68,-
25-JUN-2008,RANEENGINE,Rane Engine Valve Limited,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,SELL,28158,141.40,-
25-JUN-2008,RANEENGINE,Rane Engine Valve Limited,MANSUKH SECURITIES & FINANCE LTD,SELL,49760,140.30,-
25-JUN-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,154147,140.53,-
25-JUN-2008,SELMCL,SEL Manufacturing Company,HARDIK M MITHANI,SELL,102262,585.56,-
25-JUN-2008,SIMPLEXINF,Simplex Infrastructures L,TEMPLETON MUTUAL FUND A/C FRANKLIN INDIA FLEXI CAP FUND,SELL,327088,470.01,-
25-JUN-2008,SIMPLEXINF,Simplex Infrastructures L,TEMPLETON MUTUAL FUND A/C FRANKLIN INDIA SMALLER CO. FUND,SELL,377715,470.01,-
BSE Bulk Deals to Watch - June 25 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
25/6/2008 500058 BIHAR SPON I MODI RUBBER LTD S 541952 15.21
25/6/2008 505923 CEEKAY DIAKI I S F SECURITIES LTD B 38135 58.22
25/6/2008 532022 FILAT FASH DEENDAYAL M BOHARA S 33000 29.35
25/6/2008 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 105000 181.76
25/6/2008 532986 NIRAJ CEMENT LATIN MANHARLAL SEC PVT LTD B 53015 195.22
25/6/2008 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD S 95716 201.80
25/6/2008 532606 PAREKH ALUM BIPIN DHARAMSEY B 98000 126.00
25/6/2008 532606 PAREKH ALUM LICMF EQUITY FUND SCHEME 17 S 100000 126.02
25/6/2008 532988 RANE ENGVL MANSUKH STOCK BROKERS LTD B 46698 139.58
25/6/2008 532988 RANE ENGVL BHANDARI RAKHI KALPESH B 29517 143.25
25/6/2008 532988 RANE ENGVL MANSUKH STOCK BROKERS LTD S 46698 139.76
25/6/2008 532988 RANE ENGVL BHANDARI RAKHI KALPESH S 29517 141.30
25/6/2008 532886 SEL MANUF HARDIK M MITHANI B 93190 589.20
25/6/2008 532886 SEL MANUF HARDIK M MITHANI S 93080 587.66
25/6/2008 531499 SYBLY INDUSR LAKSHMI NATH MEHROTRA B 62000 5.78
25/6/2008 531499 SYBLY INDUSR LEXUS INFITECH LIMITED S 35000 5.81
25/6/2008 531499 SYBLY INDUSR MILLENNIUM INNOVATIONS PVT LTD. S 27137 5.70
Post Session Commentary - June 25 2008
Indian market ended with gains due to continuous buying support in key indices since afternoon. It was a smart pull back rally for the markets in last hour of trade after remained unstable for major part of the day. The domestic market opened today on the down beat note and plunged to a new low as witnessed sharp sell off in opening trade. This was due to the RBI’s hike in the key lending rate and the CRR by 50 basis points each to tame inflation that hit a 13-year high early in June. As a second increase this month in its repo rate, the RBI raised the key lending rate to 8.5% from 8.0% with immediate effect. RBI will raise the cash reserve ratio to 8.75% from 8.25% in two stages, to 8.5% from July 5 and to 8.75% from July 19. Further, market gained ground as investors bought shares at lower levels to close in green. At present Left-UPA political crises passed, but N-issue still exists after today’s meeting between the government and left parties with a decision to meet again. From the sectoral front, metal, oil & gas, capital goods and reality stocks led the advance, while banks, IT and FMCG continued to drag. The market breadth was positive as 1,370 stocks closed in green and 1,264 stocks closed in red while 73stocks remained unchanged.
The BSE Sensex closed higher by 113.49 points at 14,220.07 and NSE Nifty ended up by 61.55 points at 4,252.65. The BSE Mid Caps and Small Cap closed positive with rise of 33.92 points and 51.60 points 5,746.66 and 7,058.02 respectively. The BSE Mid Cap and BSE Small Cap ended with improvement of 1.0% each. The BSE Sensex touched intraday high 14,248.65 and intraday low of 13,731.54.
Gainers from the BSE are Reliance Com Ltd (7.20%), Tata Steel (4.46%), DLF Ltd (4.19%), Reliance Infra (4.17%), TCS Ltd (4.00%), Bharti Airtel (3.92%), Ranbaxy Lab (3.83%), BHEL (3.67%) and Relaince (3.35%).
Losers from the BSE are HDFC (4.29%), Wipro Ltd (2.91%), Cipla Ltd (2.54%), Infosys Tech (2.48%), ITC Ltd (2.46%), Satyam Computer (1.96%), Grasim Industries (1.75), Tata Motors (1.50%) and ICICI Bank Ltd (1.06%).
The Metal index closed higher by 396.32 points at 13,765.14. Gainers are Gujarat Nre C (7.62%), JSW SL (4.72%), Tata Steel (4.46%), Welspan Gujaraqt Sr (3.85%), Steel Authority (3.18%), Maharashtra Sea (2.76%), and Jindal Steel (2.52%).
The Oil & Gas index closed up by 265.13 points at 9,411.56. As Aban Offshore (5.00%), Essar Oil Ltd (4.98%), HPCL (4.90%), Reliance Pet (4.03%), Reliance (3.35%) and Cairn India (2.80%) closed in positive territory.
The Capital Goods index advanced by 162.58 points to close at 10,802.18. Major gainers are Areva (7.69%), Punj Lloyd (6.22%), Seimens Ltd (4.02%), BHEL (3.67%), Elecon Eng C (3.42%) and Praj Industries (3.07%).
The Reality Index closed higher by 109.41 points at 5,207.85. Gainers are Unitech Ltd (7.56%) along with Purvankara (7.33%), Penland Ltd (4.49%), Mahindra Life (4.21%), DLF Ltd (4.19%) and Parsvnath (2.66%).
The IT index went down by 46.56 points to close at 4,094.95 as Wipro Ltd (2.91%), Infosys Tech (2.48%), Patni Computer (1.96%), Satyam Computer (1.96%) and HCL Techn (1.64%) closed in negative territory.
The Banking index closed down by 23.85 points at 6,475.81. Lossers are OBC (6.17%), Allahabad Bank (4.72%), Canara Bank (3.43%), Yes Bank (2.74%), Kotak Bank (2.49%) and Union Bank (2.23%).
Volatile market ends buoyant
The market wiped out loss of more than 350 points incurred in the first half, after a strong bout of buying led by Reliance Communications, Tata Steel and DLF triggered wide-spread buying thereafter. In a highly volatile trading session, the Sensex resumed 251 points lower at 13,856 following weakness in Asian indices and crashed to the day's low of 13,732 on relentless selling. While the market was on a recovery path thereafter, the Sensex witnessed a sharp turnaround in afternoon as gains in heavy weights, metal, oil and realty propelled it to an intra-day high of 14,249. After gyrating 517 points during the intra-day trades, the Sensex gained 113 points to close at 14,220, while the Nifty ended 62 points higher at 4,253.
The market breadth ended positive. Of the 2,704 stocks traded on the BSE 1,390 stocks advanced, 1,247 stocks declined and 67 stocks ended unchanged. Except the BSE IT, BSE FMCG and BSE Bankex index, all other sectoral indices ended in positive territory. The BSE Metal index led the pack and gained 2.96% at 13,765 followed by the BSE Oil & Gas index (up 2.90% at 9,411.56) and the BSE Realty index (up 2.15% at 5,207.85).
Reliance Communications was the star performer among the heavyweights and the stock soared 7.20% at Rs509.05. Among the other major gainers, Tata Steel advanced 4.46% at Rs742.95, DLF jumped 4.19% at Rs458.30, Reliance Infrastructure rose 4.17% at Rs948.95, Tata Consultancy Services moved up by 4% at Rs877.75, Ranbaxy Laboratories advanced 3.92% at Rs545.40 and Bharti Airtel added 3.83% at Rs780. However, HDFC, Wipro, Cipla, Infosys and ITC inched lower.
Metal stocks were in demand and scaled higher. Gujarat NRE soared 7.62% at Rs136.30, JSW flared up 4.72% at Rs1,006.70, Tata Steel added 4.46% at Rs742.95, Welspun Gujarat gained 3.85% at Rs319.95 and SAIL was up 3.18% at Rs150.85. In the Oil pack, Aban Offshore zoomed 5% at Rs3,156.15, Essar Oil shot up by 4.98% at Rs214.85, HPCL rose 4.90% at Rs199.10 and Reliance Petroleum gained 4.03% at Rs199.10.
Over 4.88 crore Spice Telecom shares changed hands on the BSE followed by Reliance Natural Resources (1.39 crore shares), Reliance Petroleum (1.17 crore shares), Ispat Industries (1.08 crore shares) and IFCI (1.04 crore shares).
Bulls emerge victorious after five days of defeat
Equities staged a solid rebound after touching fresh calendar 2008 lows in early trade. The initial jolt was caused by the Reserve Bank of India's move late evening yesterday, 24 June 2008, to hike the key lending rate in an aggressive attempt to combat over 11% inflation. However, short covering ahead of the expiry of June 2008 derivatives contracts tomorrow, 26 June 2008, provided a foundation for the recovery. Positive European and Asian markets also helped the battered Indian bourses recover
Heavyweights Reliance Industries and Bharti Airtel, helped the market snapped its five-day declining trend. The market breadth turned positive later in the day in contrast to a weak breadth earlier in the day.
RBI raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. It also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.
The 30-share BSE Sensex gained 113.49 points or 0.80% at 14,220.07. At the day’s high of 14,248.65 hit in late trade, the Sensex gained 142.07 points. Sensex opened 333.27 points lower at 13,776.21 and slipped further to touch a low of 13,736.01 in early trade. At the day’s low, the Sensex lost 370.57 points.
The broader based S&P CNX Nifty surged 61.55 points or 1.47% at 4,252.65. Nifty June 2008 futures were at 4256.80, a premium of 4.15 points as compared to spot closing.
As per provisional data, foreign funds today sold shares worth a net Rs 363.71 crore. Domestic funds bought shares worth a net Rs 529.87 crore.
Volatility is likely to remain high tomorrow as derivatives contracts for June 2008 series expire. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 43.10% while that of Nifty was 44.70%, as on Tuesday, 24 June 2008.
Bears have been calling the shots on the bourses for a while now. The Sensex shed 1590.32 points or 10.13% in five trading sessions to 14,106.58 on Tuesday, 24 June 2008 from a recent high of 15,696.90 on 17 June 2008.
The BSE Sensex is down 6,066.92 points or 29.90% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is 6,986.70 points or 32.94% away from its all-time high of 21,206.77 struck on 10 January 2008.
Sectoral indices on BSE displayed mixed trend. The BSE Metal index (up 2.96% to 13,765.14), BSE Power (up 1.93% to 2,444.42), BSE Realty index (up 2.15% at 5,207.85), BSE TecK index (up 1.17% to 3,198.64), BSE Consumer Durables index (up 1.71% to 3,782.86), BSE Capital Goods index (up 1.53% at 10,802.18), outperformed the Sensex.
The BSE FMCG index (down 0.76% to 2,130.35), BSE Auto (up 0.47% at 3,860.88), BSE Oil & Gas index (up 2.90% to 9,411.56), BSE IT index (down 1.12% to 4,094.95), BSE Bankex (down 0.37% at 6,475.81), BSE PSU index (up 0.25% to 6,055.11), and BSE Health Care index (up 0.59% at 4,189.98), underperformed the Sensex.
The market breadth was positive. On BSE, 1379 shares advanced as compared to 1260 that declined. 68 remained unchanged.
The BSE Mid-Cap index was up 0.59% to 5,747.60 and the BSE Small-Cap index was up 0.74% to 7,058.02. Both these indices underperformed the Sensex
The total turnover on BSE amounted to Rs 5240 crore as compared to Rs 5,413.87 crore yesterday, 24 June 2008. Turnover in NSE’s futures & options segment amounted to Rs 81001.29 crore as compared to Rs 70250.13 crore yesterday, 24 June 2008.
Among the 30-member Sensex pack, 17 gained while the rest slipped.
Reliance Communications (RCom), the country’s second largest telecom services provider in terms of market capitalisation galloped 6.85% to Rs 507.40 on 31.95 lakh shares. It was the top gainer from Sensex pack. As per reports, RCom’s proposed merger deal with South Africa based global operator, MTN is expected to close by first week of July 2008
Shares from metal sector surged. Hindalco Industries (up 2.18% to Rs 147.90), Tata Steel (up 4.18% to Rs 741), JSW Steel (up 4.23% to Rs 1002), Sesa Goa (up 2.12% to Rs 3370), and Steel Authority of India (up 2.91% to Rs 150.45), were the other gainers from metal sector.
Bharat Heavy Electricals (Bhel), the country’s largest state-run engineering company in terms of order book, surged 3.88% to Rs 1445. As per recent reports, Bhel has paid 42.8% higher advance tax at Rs 300 crore in the first installment of this financial year over the corresponding period in the previous year.
However Larsen & Toubro, the country’s largest private sector engineering company in terms of order book slipped 0.16% to Rs 2307, after touching a low of Rs 2235.25. The stock is currently trading 1:1 cum bonus.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) advanced 4.05% to Rs 2149.95 on 13.16 lakh shares. RIL has reportedly signed a cooperation agreement with UAE-based Crescent Petroleum to jointly undertake projects of mutual interest in the region's energy sector.
Bharti Airtel (up 4.58% to Rs 785) and Reliance Infrastructure (up 3.55% to Rs 943.30), ), edged higher from Sensex pack.
India’s leading pharma company in terms of sales Ranbaxy Laboratories jumped 4.12% to Rs 546.95 after receiving tentative approval from US Food and Drug Administration for manufacturing and marketing valganciclovir hydrochloride tablets in 450 miligram strength.
India’s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) rose 1.73% to Rs 870.10. The company posted 6.77% rise in net profit to Rs 16701.65 crore on 6.54% increase in net sales to Rs 64859.18 crore in the year ended March 2008 over the year ended March 2007. The company announced the results during trading hours today, 25 June 2007.
Real estate stocks rebounded from early lows. DLF (up 2.35% to Rs 450.20), Unitech (up 7% to Rs 182.60), Purvankara Projects (up 6.83% to Rs 183), Mahindra Lifespace Developers (up 2.45% to Rs 498), and Anant Raj Industries (up 0.81% to Rs 137), gained.
Auto stocks staged a sharp recovery from early lows. India’s top small car maker Maruti Suzuki India advanced 3.15% to Rs 700, off day’s low of Rs 640. However, Tata Motors (down 1.41% to Rs 475), and Mahindra & Mahindra (down 0.08% to Rs 537) declined.
Banking and financial shares though in the red pared losses. ICICI Bank (down 1.16% to Rs 697, off day’s low of Rs 675.10), State Bank of India (down 0.49% to Rs 1206, off day’s low of Rs 1155), and Kotak Mahindra Bank (down 2.55% to Rs 525, off day’s low of Rs 512.50), recovered from lower level
India’s largest dedicated housing finance company, Housing Development Finance Corporation slumped 4.47% to Rs 2165 on concerns higher interest rates will slow down demand for housing loans. A total of 1.83 lakh shares were traded on the counter. It was the top loser from the Sensex pack.
Software pivotals were subdued after Indian rupee firmed against the dollar. Satyam Computer Services (down 1.12% to Rs 449), Wipro (down 2.59% to Rs 458), and Infosys (down 2.15% to Rs 1754.50), declined. However India’s largest software services exporter TCS vaulted 4.72% to Rs 883.80.
The partially convertible Indian rupee was trading at 42.78/79 per dollar in afternoon trade, stronger than Tuesday's close of 42.9625/9700. A firm rupee impacts margins of IT firms negatively as they derive majority of their revenue from exports to the US.
ITC (down 2.65% to Rs 186), Cipla (down 2.75% to Rs 207.15), and Grasim (down 2% to Rs 2046), edged lower from the Sensex pack.
Sugar stocks gained on momentum buying. Shree Renuka Sugars (up 8.55% to Rs 112.30), Bajaj Hindustan (up 1.87% to Rs 183.50), Balrampur Chini Mills (up 2.89% to Rs 85.40), Uttam Sugar Mills (up 4.94% to Rs 61.60), and Sakthi Sugar (up 4.54% to Rs 67.90), surged.
Spice Communication was the top traded counter on BSE with total turnover of Rs 339.39 crore followed by Reliance Capital (Rs 321.40 crore), Reliance Industries (Rs 276.49 crore), Reliance Petroleum (Rs 196.23 crore), and ONGC (Rs 156.66 crore), in that order.
Spice Communication led the volume chart clocking volumes of around 4.88 crore shares followed by Reliance Natural Resources (1.39 crore shares), Reliance Petroleum (Rs 1.17 crore shares), Ispat Industries (1.08 crore shares) and IFCI (1.04 crore shares), in that order.
Spice Communication surged 32.93% to Rs 72.25 on huge volumes of 4.87 crore shares after Idea Cellular said it will buy 40.8% stake in the company at Rs 77.30 a share. Meanwhile, shares of Idea Cellular were up 2.37% at Rs 101.50.
Idea Cellular said it would merge Spice with itself through a share swap whereby Spice shareholders would get 49 Idea shares for every 100 Spice shares held. Idea also said that it would make an open offer for additional 20% stake to Spice Communicaton shareholders at Rs 77.30 a share.
Among the side counters, GHCL (up 10% to Rs 65.50), Rayban Sun Optics (up 16.89% to Rs 91), Sasken Communications (up 13.26% to Rs 152), and Bajaj Auto Finance (up 12.76% to Rs 167), surged.
Amara Raja Batteries rose 3.47% to Rs 159.50 after posting 71.94% growth in net profit to Rs 26.18 crore on 61.59% increase in total income to Rs 318.10 crore in Q4 March 2008 over Q4 March 2007. The company announced the results before trading hours today, 25 June 2007.
Hind Rectifiers rose 4.80% to Rs 155 after it announced issue of bonus shares in the ratio of one equity share for each equity share held.
Patel Engineering rose 1.37% to Rs 366.50 on reporting 58.4% rise in net profit to Rs 53.78 crore on 26.7% increase in net sales to Rs 501.98 crore in Q4 March 2008 over Q4 March 2007. The company announced the results after trading hours yesterday, 25 June 2007.
Nagarjuna Construction Company declined 1.11% to Rs 151 even as the company said it has bagged three new orders aggregating to Rs 333 crore from three different clients. The company made this announcement during trading hours today, 25 June 2007.
GMR Infrastructure gained 2.96% to Rs 99 after the company said it has bought 50% stake in Netherlands-based power generation company InterGen N.V. for $1.1 billion. The company made this announcement before trading hours today, 25 June 2007.
Jet Airways India jumped 5.36% to Rs 549 despite reporting a net loss of Rs 221.18 crore in Q4 March 2008 as compared to net profit of Rs 88.01 crore in Q4 March 2007. Jet Airways India’s net sales rose 39.5% to Rs 2759.90 crore in Q4 March 2008 over Q4 March 2007. The company announced the results after trading hours yesterday, 24 June 2007.
In a crucial event on the political front, an UPA-Left committee on the Indo-US nuclear deal will meet later today, 25 June 2008, to discuss the deal. However, it is difficult to say whether there will be a concrete outcome or not. The Left parties have already made it clear that they withdraw their support to the government if it moves ahead with the nuclear deal. This could further worsen the already weak stock market sentiment.
Crude oil prices rose 26 cents to settle at $137.00 a barrel yesterday, 24 June 2008, on the New York Mercantile Exchange
European markets, which opened after Indian market, were trading higher in early trade. Key benchmark indices in United Kingdom, France and Germany were up by between 0.44% and 1.09%.
Asian markets, which opened before Indian market were trading mixed today, 25 June 2008. China's Shanghai Composite (up 3.65% at 2,905.54), South Korea's Seoul Composite (up 0.41% at 1,717.91), Taiwan Weighted (up 1.51% at 7,855.06), Hang Seng (up 0.64% to 22,598.79), Singapore's Straits Times (up 0.37% at 2,973.30) advanced. However, Japan's Nikkei slipped 0.14% at 13,829.92
US markets ended lower yesterday, 24 June 2008 on concerns about the economy, after a report showed consumer confidence hit a 16-year low. The Dow Jones industrial average lost 34.93 points, or 0.29%, to 11,807.43. The Standard & Poor's 500 index fell 3.71 points, or 0.28%, to 1,314.29, and the Nasdaq composite index declined 17.46 points, or 0.73%, to 2,368.28.
Daily Call - June 25 2008
Markets got into a deeper morass Tuesday as a late rally faced renewed selling, making the stocks and the indices close near their day’s lows. And late in the evening Dr. Reddy found his missing screw driver which he probably misplaced at Pune and promptly tightened the nuts. A 50 basis point hike in Repo Rate and CRR should send the banks and other interest rate sensitives tumbling.
The Nifty could test the 4000 level in the morning trade. To call that a support may be misleading. The electronic media was aghast at the likes of Hindustan Unilever losing Rs 10 in the last 40 minutes of trade. These are bearish times and stocks that do well for some time are like the sacrifical lamb that is being fed today to be cut tomorrow. There are no holy cows in the markets. The stock markets at this stage is quite like an bowling alley, where any standing pin is a target. Protect your capital. ‘Jo dar gaya, samjho bach gaya’. For the nimble footed traders, however, the morning capitulation could provide a long trading opportunity for a few minutes.
Market headed for weak opening in reaction to RBI’s move
The market is geared for weak start today reacting to Reserve Bank of India's move (after market hours) yesterday, 24 June 2008, hiking key lending rate and banks' reserve requirements in an aggressive step to combat over 11% inflation, and signaled it would act again if needed. Global cues are not supportive either.
The central bank raised its key lending rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. It also increased its cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.
In a crucial event on the political front, the UPA and Left will meet today, 25 June 2008, to discuss the Indo-US nuclear deal. However, it is difficult to say whether there will be a concrete outcome or not. The Left parties have already made it clear that they will vote against the government if it moves ahead with the deal. This could further worsen the already weak sentiment.
Volatility is expected to remain high in the near term as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 43.10% while that of Nifty was 44.70%, as on Tuesday, 24 June 2008.
Asian markets were trading mixed today, 25 June 2008. China's Shanghai Composite gained 0.46% or 12.97 points at 2,815.99. Taiwan Weighted rose 0.54% or 41.79 points at 7,779.91. However, Japan's Nikkei plunged 1.48% or 204.59 points at 13,644.97, Singapore's Straits Times was down 0.20% or 5.80 points at 2,956.36 and South Korea's Seoul Composite fell 0.74% or 12.72 points at 1,698.12
US markets ended lower yesterday, 24 June 2008. The Dow Jones industrial average lost 34.93 points, or 0.29%, to 11,807.43. The Standard & Poor's 500 index fell 3.71 points, or 0.28%, to 1,314.29, and the Nasdaq composite index declined 17.46 points, or 0.73%, to 2,368.28.
Back home, equities extended losses for the fifth straight day yesterday, 24 June 2008. The 30-share BSE Sensex was down 186.74 points or 1.31% at 14,106.58 and the broader based S&P CNX Nifty slumped 75.30 points or 1.76% at 4,191.10, on that day.
Sensex has lost 1590.32 points or 10.13% in five trading sessions, from its close of 15,696.90 on 17 June 2008, due to political uncertainty, and on fears of further rise in interest rates by the Reserve Bank of India to combat inflation
The barometer index has shaved 6180.41 points or 30.46% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is down 7100.19 points or 33.48% from its all-time high of 21,206.77 struck on 10 January 2008.
As per provisional data, foreign funds yesterday, 24 June 2008, bought shares worth a net Rs 90.06 crore. Domestic funds bought shares worth a net Rs 475.94 crore.
Foreign institutional investors (FIIs) were net sellers of Rs 1086.16 crore in the futures & options segment yesterday, 24 June 2008. They were net sellers of index futures to the tune of Rs 714.67 crore and sold index options worth Rs 425.34 crore. They were net buyers of stock futures to the tune of Rs 60.86 crore and sold stock options worth Rs 7.01 crore.
Crude oil prices rose 26 cents to settle at $137.00 a barrel yesterday, 24 June 2008, on the New York Mercantile Exchange
Slide may continue
Market may slide further on account of weak Asian markets in morning trades and overnight fall in the US markets. Political uncertainties and continued selling pressure may also drag the domestic indices further down. The FIIs remained net sellers in equities for last couple of sessions may also weigh on the investors' sentiment. Key indices, the Nifty may get support at 4150 level and on the upside it could test higher levels at 44245. The Sensex has a likely support at 14,000 and may face resistance at 14,250.
US indices ended weak on Tuesday amid a fresh rise in crude oil prices. The Dow Jones dropped by 35 points to close at 11807 whereas the Nasdaq ended 17 points lower at 2368.
Indian floats ended lower. VSNL was the major loser dropped 4.34%, while Tata Motors, HDFC Bank, ICICI Bank, Infosys, MTNL and Rediff dropped nearly 2-3% each. Wipro and Patni Computers dropped nearly 1% each. Dr Reddy's & Satyam was the only gainer amongst the ADRs and gained 1.37% and 0.08%.
Crude oil prices moved up, with the Nymex light crude oil for July delivery rising by 26 cents to close at $137 a barrel. In the commodity space, the Comex gold for August 2008 series added $4.40 to settle at $891.60.
Pre Session Commentary - June 25 2008
The Indian Market is expected to have negative opening on the back of weak global cues, political uncertainty and rates hike by RBI. Tuesday, the Indian market closed in red for the fifth straight trading day backed by selling across the ground. The BSE Sensex fall below the 14,000 mark for the first time since late August 2007. Though the market showed some buying interest from the investors at the initial session but later tumbled to give up all its gains. The market lost the momentum after the mid session to close on the back foot due to lack of support from the investors. From the sectoral front, metal, metal stock was major victim, which ended with a cut of more than 3.5 % with all indices closed in red. The BSE Sensex closed lower by 186.74 points at 14,106.58 and NSE Nifty ended down by 75.3 points at 4,191.10. The BSE Mid Cap and BSE Small Cap ended with a cut of more than 1.5% each. We expect that market may remain cautious during the trading session.
Investors will have eye on the crucial meeting of the members of UPA with left scheduled today to decide on the fate of proposed deal between the Congress party and the U.S. President. Left parties had threatened to withdraw support if the government went ahead with the deal.
RBI on Tuesday raised its key lending rate and the CRR by 50 basis points each to tame inflation that hit a 13-year high early in June. As a second increase this month in its repo rate, the RBI raised the key lending rate to 8.5% from 8.0% with immediate effect. RBI will raise the cash reserve ratio to 8.75% from 8.25% in two stages, to 8.5% from July 5 and to 8.75% from July 19. These hikes will have adverse implications for the manufacturing sector, which have impact of high interest rates.
US markets closed lower on Tuesday. The Federal Reserve Bank in the U.S. began a two-day policy meeting on Tuesday for decision on interest rate and is expected to hold key rate for short-term lending at current rate of 2%, at the end of policy meeting today.
The Dow Jones Industrial Average (DJIA) closed lower by 34.93 points at 11,807.43 along with NASDAQ down by 17.46 points to close at 2,368.28 and S&P 500 dropped by 3.71 points to close at 1,314.29.
Indian ADRs ended down. In technology sector, Satyam advanced marginally by (0.08%) while Infosys dropped by (2.40%) along with Wipro by (1.04%) and Patni Computers by (0.62%). In banking sector, ICICI bank and HDFC bank decreased by (3.83%) and (3.38%) respectively. In telecommunication sector, Tata Communication and MTNL reduced by (4.34%) and (0.65%). Sterlite industries declined (1.58%).
Today the major stock markets in Asia are trading mixed. Taiwan Weighted is trading higher by 41.79 points at 7,779.91 while Japan’s Nikkei is trading down by 204.59 points at 13,644.97. Hong Kong market is closed today on account of holiday.
The FIIs on Tuesday stood as net seller in equity and debt. The gross equity purchased was Rs2,273.90 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,894.70 Crore and gross debt sold stood at Rs132.70 Crore. Therefore, the net investment of equity reported was (Rs620.80) Crore and net debt was (Rs132.70) Crore.
Today, Nifty has support at 4,069 and resistance at 4,262 and BSE Sensex has support at 13,635 and resistance at 14,352.
US Markets cautious
Market becomes extremely cautious a day ahead of Federal Reserve’s monetary policy decision
US Market ended the day with modest losses today, Tuesday, 24 June, 2008. A rebound in financial sector helped market partially offset some disappointment over weak consumer sentiment spurred by an earnings warning from UPS. It was very clear that market turned cautious a day ahead of Federal Reserve’s crucial meeting on monetary policy decision. The Fed kicked off its two-day Federal Open Market Committee meeting today. The market expects the fed funds rate will remain unchanged.
The Dow Jones industrial Average traded in red for the entire first half today. It then slipped in the green in the post lunch hours but once again slipped in the red before the closing bell. Going into close, the index ended the day with a loss of 34.9 points at 11,807.43. The Nasdaq Composite Index, finished lower by 17.4 points at 2,368.28. S&P 500 finished lower by 3.7 points at 1,314.29.
Fifteen out of thirty Dow stocks ended in the red today. Caterpillar was one of the Dow laggards while Merck was one of the top Dow winners.
Among one of the major news hitting market sentiment today, UPS lowered its second quarter earnings guidance, citing the increase in fuel costs and the sluggish U.S. economy.
In terms of economic data, consumer confidence in June slipped 13% to its lowest level since 1992, after consumers were bombarded with reports of spiking food and energy costs and rising unemployment.
Also, the housing industry continued to remmain sluggish, although the rate of home price declines is slowing. The S&P/Case Shiller index showed that house prices in 20 major metro areas fell 1.6% compared to last month - the smallest drop since September. Home prices are now down 15.2% on a y-o-y basis, the largest drop in the composite's eight year history.
Crude futures remained almost unchanged today. Prices rose marginally after Royal Dutch Shell Plc said that it resumed production at its Nigerian Bonga field that was attacked last week. But prices had peaked $139 as traders digested production news from Nigeria and Saudi Arabia. Crude-oil futures for light sweet crude for August delivery today closed at $137/barrel (higher by $0.26/barrel or 0.2%) on the New York Mercantile Exchange. It traded as high as $138.85 during intra day trading.
Shell shut Bonga output on 19 June after militants attacked a production vessel at the field 75 miles off the coast of Nigeria. Nigeria was overtaken by Angola in April as Africa's biggest oil producer because attacks cut the country's output.
At the currency markets on Tuesday, the dollar fell against the euro before the Fed's meeting on interest rates today and tomorrow. The dollar index which measures the greenback against a basket of trading partners was at 73.257, compared with 73.470 late Monday.
Trading volume was relatively light, with 1.3 billion shares exchanged on the New York Stock Exchange, where declining stocks outran those advancing by more than 2 to 1. On the Nasdaq, 914 million shares traded, and decliners outpaced advancing
Durable goods orders data for May are due before tomorrow’s open. The report offers market participants a look at the orders placed with domestic manufacturers during a given month. New home sales figures for the month of May and the weekly crude oil inventory report are due shortly after that. But the day's primary focus will be the Federal Open Market Committee's monetary policy decision and its accompanying directive.
Trading Calls - June 25 2008
Nifty (4191) Sup 4050 Res 4270
Sell Jet Airways (518) SL 523 Target 508, 504
Sell RCom (474) SL 481
Target 464, 460
Sell Yes Bank (136) SL 140
Target 126, 123
Sell DLF (440) SL 447
Target 427, 424
Sell Titan (1019) SL 1034
Target 989, 980
Inflation: Reddy to do anything!
You block your dream when you allow your fear to grow bigger than your faith.
For the time being there is no fear of the unknown. The RBI has done what he can and we haven’t seen the last of hikes as yet. Just the other day the RBI governor Dr. Reddy had hinted at a "calibrated" approach to control inflation.In what seems to be a desperate political move to reign in inflation, the RBI has hiked both the repo rate and the CRR by half a percentage points each. We hear that a section of the market was perhaps aware of something like this in the offing. That explains the sharp fall yesterday in the last half an hour. The bloodbath may continue, at least at the start today.
On the political front, expect lots of voices from New Delhi as the UPA-Left panel on the Indo-US nuke deal meets today. Both sides may try and hammer out some compromise formula, as nobody wants an early election. The market may benefit if the outcome of the meet is definite. Any further uncertainty on this front will hit market sentiment. One will have to see which way the dice rolls. As far as global markets are concerned, there hasn't been any major fall, though the undertone remains precarious amid fresh worries over the financial sector and near-record crude oil prices.
Coming back to our market, banking, realty and auto stocks will bear the brunt of the selling pressure. Others like capital goods, construction and consumer-centric sectors may also decline. This doesn't mean stocks in the rest of the sectors will be any better off. Overall, we expect a gap-down opening. However, things may stabilise a wee bit as FIIs weren't big sellers yesterday and globally things are not that bad.
Much of the action today will be seen in the F&O segment, where most indicators are pointing to further weakness. For the Nifty, 4200 was seen as a big support. But, that has been broken. Most traders are net short. With F&O expiry tomorrow, Fed announcement (nothing much is expected) later today, and the UPA-Left meet, the bulls have their task cut out. Expect high volatility as has been the case in the last two days. In these turbulent and uncertain times, like we mentioned yesterday pick up the better counters available at rates you once asked for!.
FIIs were net buyers of Rs900.6mn (provisional) in the cash segment on Tuesday while the local institutions poured in Rs4.76bn. In the F&O segment, foreign funds were net sellers of Rs10.86bn.
On Monday, FIIs were net sellers of Rs6.21bn in the cash segment. With this, they have pulled out more than $6bn from the Indian market this year.
Asian stocks fell for a fifth day, led by carmakers and electronics manufacturers. Toyota Motor and Matsushita Electric led declines after the US Conference Board's confidence index tumbled to a 16-year low. BHP Billiton dropped the most in two weeks after metals prices fell.
The MSCI Asia Pacific Index dropped 1% to 137.22 as of 11 a.m. in Tokyo, extending a four-day, 4.1% decline. About five stocks fell for each two that rose today, with nine of the benchmark's 10 industry groups retreating.
The Asian benchmark has lost 13% this year. More than $8 trillion in global stock market value has been wiped out in 2008. Japan's Nikkei 225 Stock Average slipped 1.5% to 13,644.97. Australia's S&P/ASX 200 Index lost 0.7%.
US stocks finished a volatile session modestly lower as investors turned cautious one day ahead of the Fed's interest rate decision. The day's economic reports backed a growing view among experts that the Fed would not hike rates.
After rising and falling throughout the day, the Dow Jones Industrial Average ended at 11,807.43, off 34.93 points, or 0.3%. Fifteen of the Dow's 30 components settled lower. The S&P 500 index fell 3.71 points, or 0.3%, to 1,314.29, with materials leading the declines. The Nasdaq fell 17.46 points to 2,368.28.
Market breadth was negative. Trading volume was relatively light.
Stocks were choppy throughout the session, falling to the worst levels of the day after the mid-morning release of the June consumer confidence index. They briefly turned positive near midday on a rally in bank and auto stocks. But the recovery attempt petered out by the afternoon.
Ahead of the Fed meeting, reports are due on durable goods orders, new home sales and the weekly crude inventories report.
The Conference Board's Consumer Confidence index fell to 50.4 in June, the fifth-lowest level ever, from 58.1 in the previous month. Economists thought it would fall to 56. The report reflects fears associated with a weakening labor market, ongoing erosion in the housing market, rising oil prices and inflationary pressures.
Another report showed continued erosion in home prices. The S&P/Case-Shiller 20-city Home Price index for April fell 1.4% from March and 15.3% from a year earlier. Both drops were smaller than economists had expected, but nonetheless reflected the ongoing slide in prices amid the housing market fallout.
US light crude oil for August delivery rose 26 cents to settle at $137 a barrel on the New York Mercantile Exchange. The national average price for a gallon of regular unleaded gas fell to $4.069 from $4.072 the previous day, according to AAA.
In currency trading, the dollar declined versus the euro and the yen. In the bond market, Treasury prices rose modestly, lowering the yield on the benchmark 10-year note to 4.10% from 4.16% late on Monday. COMEX gold for August delivery rose $4.40 to settle at $891.60 an ounce.
European shares declined. The pan-European Dow Jones Stoxx 600 index dropped 0.8% to 292.54. The index touched a low of 289.65 in the session, temporarily breaching the 290.26 low hit in March. Before March, the index hadn't traded around these levels since November 2005.
The UK's FTSE 100 closed down 0.6% at 5,634.70, Germany's DAX 30 fell 0.8% to 6,536.06 and the French CAC-40 lost 0.8% at 4,473.76.
In the emerging markets, the Bovespa in Brazil was down 0.7% at 64,167 while the IPC index in Mexico fell 0.6% to 29,291. The RTS index in Russia slumped 1.4% to 2308 and the ISE National-30 index in Turkey dropped 1.1% to 45,216.
Volatility to prevail
A highly volatile session ended in negative terrain for fifth straight day on back of weak global cues coupled with al round selling in scrips across the sectors. Markets closed at days low and Nifty closed below the 4,000 mark for first time since Aug 24 2007.
The fall could be attributed to heavy selling in index heavyweights like Infosys, L&T and Tata Steel. However, bucking the negative trend were, Reliance Industries, HDFC and BHEL.
All the key Sectoral indices also ended in red, the BSE Metal index was the biggest loser, (down 3.5%), other like BSE PSU index (down 2.8%), BSE FMCG index (down 2.5%) and BSE IT index (down 2.1%).
Among the 50-Nifty, 41 stocks ended in negative terrain and only 9 stocks ended in green. Finally, the BSE benchmark Sensex lost 186 points to close at 14,106 and the Nifty index lost 75 points to close at 4,191.
TCS ended lower by 1.6% at Rs843. The company won a transformational engagement from the Uganda Revenue Authority (URA) to design and implement integrated tax administration system. The new system will manage all domestic domestic taxes and duties for the URA including income tax, value-added tax, witholding tax and other excise duties.
It will help the URA increase the level of tax compliance in the country, broaden the tax base and provide effecient service to Uganda's tax payers. The scrip touched an intra-day high of Rs864 and a low of Rs823 and recorded volumes of over 3,00,000 shares on BSE.
S.Kumars Nationwide gained by 0.5% to Rs106 after the company said that GIC SI would invest Rs9bn in Reid & Taylor through a fresh issue of shares and warrants. Post-conversion, GIC SI would own 25.4% of Reid & Taylor, valuing it at Rs35.40bn. The company will own 74.6% of Reid & Taylor (India) Ltd post the investment from GIC SI.
The scrip touched an intra-day high of Rs108 and a low of Rs105 and recorded volumes of over 1,00,000 shares on BSE.
Torrent Pharma rallied by over 12% to Rs174 after the company announced that it denied reports that the company’s founders would sell stake to Sun Pharma. The scrip touched an intra-day high of Rs182 and a low of Rs158 and recorded volumes of over 7,00,000 shares on BSE.
Orchid Chemicals declined by 4.7% to Rs225. The company announced that it received approval from the Canadian TPD for ANDS (Abbreviated New Drug Submission) for Piperacillin and Tazobactam for Injection.
The scrip touched an intra-day high of Rs243 and a low of Rs224 and recorded volumes of over 9,00,000 shares on BSE.
NIIT Ltd gained by 2.5% to Rs104 after the company announced that the company has entered into a strategic alliance with Infospectrum to offer proven Educational Resource Planning Solutions". The scrip touched an intra-day high of Rs105 and a low of Rs101 and recorded volumes of over 90,000 shares on BSE.
Binani Industries was down 1.2% to Rs106. The Board of Directors of the Company at its meeting held on June 23, 2008, approved the enhancement of guarantee limits from Rs16bn to Rs40bn. The scrip touched an intra-day high of Rs110 and a low of Rs106 and recorded volumes of over 3,000 shares on BSE.
Sagar Cements gained by a over 3 percent to Rs388 after the company announced that the Board of Directors at its meeting held on June 23, 2008, has decided to implement a green field cement plant of 5.5mn ton capacity in Gulbarga District in Karnataka through a special purpose vehicle to be jointly promoted with M/s. Vicat S.A., France.
To mobilize a sum of Rs700mn through issue of 10,00,000 equity shares of Rs10/- each at a premium of Rs690/- per share on a preferential basis to M/s. Vicat S.A., France, its affiliates and subsidiaries. The scrip touched an intra-day high of Rs394 and a low of Rs375 and recordede volumes of over 1,00,000 shares on BSE.
Jain Irrigation ended 2% lower to close at Rs469. The company announced that it secured contract worth Rs227.7mn. The scrip touched an intra-day high of Rs480 and a low of Rs461 and recorded volumes of over 16,00,000 shares on BSE.
Corporate News
Suzlon Energy is partnering Bahrain-based PE firm Arcapita to bid for Chinese alternative energy Company, Honiton Energy Holdings estimated at US$400mn (ET)
GMR Group is likely to buy 50% stake in US-based power generation firm InterGen in a deal valued at US$1.2bn (ET)
GIC Special Investments to acquire 25.4% stake in S Kumars’ Reid & Taylor brand for Rs9bn (ET)
HDIL buys 51% stake in Broadcast Initiatives, a Sri Adhikari Bros Group controlled media firm for an undisclosed amount (ET)
Reliance Infra bags Rs120bn EPC order from R Power to develop Shashun UMPP (BS)
Tata Group has increased stake in its South African Telecom Venture Neotel by 30% to 56% (ET)
TCS has won a contract worth US$11.5mn from Uganda Revenue Authority (ET)
Information & Broadcasting Ministry has asked DoT to initiate action against Bharti Airtel for launching IPTV services without requisite approvals (ET)
Jindal Saw is planning to set up a ship building & repair hub in Gujarat with an investment of over US$2bn (ET)
RIL and Essar Oil have agreed to buy entire crude oil from Cairn India’s Rajasthan block and are negotiating prices (ET)
ADAG Group is set to launch 24-hour FM radio station in Singapore in collaboration with local station MediaCorp Radio (ET)
Tech Mahindra has bagged a US$7.6mn deal with telecom Fiji Ltd (BL)
RIL signs an agreement with UAE-based, Crescent Petroleum Company to jointly develop oil & gas projects in Middle East (DNA)
Jet Airways and Kingfisher Airlines are moving towards zero commission structure for travel agents (ET)
IndusInd Bank has raised Rs2.2bn from the overseas market through fresh issue of shares (ET)
Vicat buys 6.67% stake in Sagar Cements for Rs700mn at Rs700/share (BS)
ICICI Ventures may list US$1.5bn realty fund on the London Stock Exchange (BS)
Essar Shipping is planning to set up ports in Brazil, China and Vietnam (ET)
IndusInd Bank hikes PLR by 50bps (BS)
NIIT has signed an agreement with Infospectrum to market latter’s customizable Educational Resource Planning solutions in schools (BL)
Nilkamal to invest Rs1.5bn to develop retail stores in India (FE)
Essar Shipping arm lines up Rs100bn expansion plans for third party logistics (DNA)
Tata Chemical to spend Rs5bn to de-bottleneck and modernized its plant in current fiscal (DNA)
Economic News
RBI hikes repo rate by 50bps with immediate effect and raises CRR by 50bps in two stages (ET)
Exports grew by 2.9% in FY08 to US$155.4bn (ET)
Car makers to increase prices by Rs,6000-Rs30,000 across models (BS)
CBDT has raised Direct Tax collection target for FY09 to Rs3.95trn (BL)
Cement prices may to increase by Rs3-5 per bag from 1st July in Bombay (FE)
RBI pumps in Rs387bn through repo window (FE)
Planning Commission says 9% growth is possible (DNA)
Morning Call - June 25 2008
Market Grape Wine :
In House :
Nifty at a support of 4137 and 4085 with resistance at 4225 and 4270 levels.
Cash : Buy GT OFFSHORE above 591 TGT 607 with S/L 585.
Cash : J P ASSOCIATES below 151 TGT 143 with S/L 154.50.
Future : ZEE TELE below 219 TGT 210 with S/L 225
Future : UNITECH below 169 TGT 160 with S/L 174.
Out House:
Markets at a support of 13636 & 13786 resistance at 14141 & 14241 levels .
Buy : Gail at dips
Buy : HDFC at dips
Buy : Infy at dips
Buy : ONGC at dips
Buy : HP at dips
Dark Horse : Wipro , HP , INFY , Ongc & ITC
Today's Pick - Chambal Fertilisers
We recommend a sell in Chambal Fertilisers & Chemicals from a short-term perspective. From the charts to the stock we note that it had been on a medium-term uptrend from its March 2008 low of Rs 41, till it encountered resistance at Rs 94 in mid June.
The reversal from Rs 94 level has been supported by negative divergence in the daily moving-average convergence and divergence (MACD).
Recently, the stock penetrated the 21-day moving average and the medium-term up trendline, signalling bearishness. The daily MACD has displayed negative divergence and is indicating a sell.
The other daily momentum indicators are declining in the neutral region towards the bearish zone. Our short-term forecast for the stock is negative. We anticipate the stock’s down move to continue until it hits our price target of Rs 66 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining stop-loss at Rs 79.
Tata Steel, Essar Oil June 2008 futures at discount
Turnover in F&O segment rises
Nifty June 2008 futures were at 4159.70, at a discount of 31.40 points as compared to spot closing of 4191.10. NSE's futures & options (F&O) segment turnover was Rs 70,250.13 crore, which was higher than Rs 66,917.33 crore on Monday, 23 June 2008.
Tata Steel June 2008 futures were at discount at 708.95 compared to the spot closing of 711.10.
Essar Oil June 2008 futures were at discount at 203 compared to the spot closing of 204.60.
Reliance Communications (RCom) June 2008 futures were near spot price at 473.65 compared to the spot closing of 474.10.
In the cash market, the S&P CNX Nifty lost 75.30 points or 1.76% at 4191.10.
Bullion metals end mixed
Gold price increases but still stays below the $900 level
Bullion metals ended higher today, Tuesday, 24 June, 2008 as the dollar weakened. But even after rising, gold prices stayed still before $900. But silver prices fell today.
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.
Comex Gold for August delivery rose $4.4 (0.5%) to close at $891.6 ounce on the New York Mercantile Exchange. It rose to a high of $896.5 during intra day trading. But prices still stayed below the $900 mark which it had crossed last week. Last week, gold prices ended higher by $30.6 (3.5%). 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% till date against a 6% 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 Tuesday, Comex silver futures for July delivery fell 15.7 cents (0.9%) to $16.633 an ounce. Last week, silver has gained 5%. Silver has gained 11% in 2008 till date.
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 Tuesday, the dollar fell against the euro before the Fed's meeting on interest rates today and tomorrow.
Since last September, Fed has axed interest rates seven times and brought it down to 2%. On the other hand, the ECB has kept rates unchanged at 4% since June, 2007.
In the crude market on Tuesday, crude oil was little changed in New York after Royal Dutch Shell said that it resumed production at its Nigerian Bonga field that was attacked last week. Crude oil for August delivery rose 26 cents to settle at $137 a barrel.
Gold had 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 higher by Rs 36 (0.29%) at Rs 12,345 per 10 grams. Prices rose to a high of Rs 12,433 per 10 grams and fell to a low of Rs 12,286 per 10 grams during the day’s trading.
At the MCX, silver prices for July delivery closed Rs 176 (0.7%) lower at Rs 23,568/Kg. Prices opened at Rs 23,798/kg and fell to a low of Rs 23,495/Kg during the day’s trading.
Crude registers marginal gains
Prices remain almost unchanged after production is resumed back at Nigeria
Crude futures remained almost unchanged today, Tuesday, 24 June, 2008. Prices rose marginally after Royal Dutch Shell Plc said that it resumed production at its Nigerian Bonga field that was attacked last week. But prices had peaked $139 as traders digested production news from Nigeria and Saudi Arabia.
Crude-oil futures for light sweet crude for August delivery today closed at $137/barrel (higher by $0.26/barrel or 0.2%) on the New York Mercantile Exchange. It traded as high as $138.85 during intra day trading. Last week, it closed lower by 0.2%. Prices are 94% higher than a year ago. For the year, crude is up by 38% till date.
Shell shut Bonga output on 19 June after militants attacked a production vessel at the field 75 miles off the coast of Nigeria. Nigeria was overtaken by Angola in April as Africa's biggest oil producer because attacks cut the country's output.
At a meeting of oil producers and consumers, during last weekend, on Sunday, Saudi Arabia said it would raise its daily production by 200,000 barrels in July. That's on top of the increase of 300,000 barrels a day announced in May.
At the currency markets on Tuesday, the dollar fell against the euro before the Fed's meeting on interest rates today and tomorrow. The dollar index which measures the greenback against a basket of trading partners was at 73.257, compared with 73.470 late Monday.
Brent crude oil for June settlement today rose $0.55 (0.4%) to $136.46 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 declined on an outlook for cooler weather in the biggest gas-consuming regions of the U.S. Natural gas for July delivery fell 19.2 cents (1.5%) to settle at $13.011 per million British thermal units.
Against this backdrop, August reformulated gasoline rose by 0.8 cent to close at $3.4635 a gallon and July heating oil rose 1.7 cents to finish at $3.8136 a gallon.
At the MCX, crude oil for July delivery closed at Rs 5,838/barrel, lower by Rs 45 (0.76%) against previous day’s close. Natural gas for July delivery closed at Rs 559.9/mmbtu, lower by Rs 11.7/mmbtu (2%).
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