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Thursday, July 03, 2008
BSE Bulk Deals to Watch - July 3 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
3/7/2008 520077 AMTEK AUTO L WARHOL LIMITED B 2000000 234.50
3/7/2008 520077 AMTEK AUTO L CITIGROUP GLOBAL MARKETS MAURITIUS PVT.LTD. S 2000000 234.50
3/7/2008 532995 AVON WEIGH NILESH V SONI B 110000 12.43
3/7/2008 532995 AVON WEIGH PRABHUDAS LILLADHER PVT. LTD. B 1582624 14.34
3/7/2008 532995 AVON WEIGH N D NISSAR B 1099129 14.36
3/7/2008 532995 AVON WEIGH BHANDARI RAKHI KALPESH B 451450 14.31
3/7/2008 532995 AVON WEIGH RAMESH VINAYAK VAZE B 100500 14.40
3/7/2008 532995 AVON WEIGH AMAR HARSHAD PATEL S 95244 17.40
3/7/2008 532995 AVON WEIGH NILESH V SONI S 110000 11.93
3/7/2008 532995 AVON WEIGH PRABHUDAS LILLADHER PVT. LTD. S 1582624 14.45
3/7/2008 532995 AVON WEIGH N D NISSAR S 1099129 14.44
3/7/2008 532995 AVON WEIGH AARAV FINANCIAL SERVICES PVT LTD S 100000 14.00
3/7/2008 532995 AVON WEIGH MOHIB NOMAN KHERICHA S 201694 15.00
3/7/2008 532995 AVON WEIGH SOFIA MOHIB KHERICHA S 201694 15.00
3/7/2008 532995 AVON WEIGH CHARTERED CAPITAL AND INVESTMENT LTD S 201694 15.00
3/7/2008 532995 AVON WEIGH SHAISHAV RAKESHBHAI SHAH S 134463 14.96
3/7/2008 532995 AVON WEIGH HARSHA RAJESHBHAI JHAVERI S 178970 14.03
3/7/2008 532995 AVON WEIGH EMERGING CAPITAL ADVISORS LTD S 201694 15.36
3/7/2008 532995 AVON WEIGH MERIT CREDIT CORPORATION LTD S 220053 16.95
3/7/2008 532995 AVON WEIGH BHANDARI RAKHI KALPESH S 451450 14.16
3/7/2008 532995 AVON WEIGH UNIPON INDIA LIMITED S 220053 16.90
3/7/2008 532989 BAFNA PHARMA PR VYAPAAR PRIVATE LIMITED B 187000 27.40
3/7/2008 509728 BHURUKA GAS PRABHU SECURITIES B 627631 23.64
3/7/2008 509728 BHURUKA GAS VIVEK AGARWAL S 138892 22.93
3/7/2008 509728 BHURUKA GAS UMAH AGARWAL S 138892 23.41
3/7/2008 509728 BHURUKA GAS SIDDHARTHA AGARWAL S 138891 22.93
3/7/2008 509728 BHURUKA GAS PRAGYA ENTREPRISES S 210956 24.60
3/7/2008 512047 NATRAJ FIN PRADIP MATHURDAS MEHTA S 71500 37.55
3/7/2008 500365 REMI METALS RAJLOK DIAGNOSTIC SYSTEM PRIVATE LIMITED B 1236566 6.02
3/7/2008 500365 REMI METALS CRESENT TRADING PRIVATE LIMITED S 1236566 6.02
3/7/2008 532663 SASKEN COMM MBL AND COMPANY LIMITED B 152268 132.51
3/7/2008 532663 SASKEN COMM MBL AND COMPANY LIMITED S 152268 132.31
3/7/2008 532993 SEJAL GLASS B K SHAH CO B 156751 67.14
3/7/2008 532993 SEJAL GLASS B K SHAH CO S 156764 66.92
3/7/2008 532863 SPICE TELE HSBC GLOBAL INVESTMENT FUNDS S 3640000 72.50
3/7/2008 519228 TEMPT.FOODS MORGAN STANLEY MAURITIUS CO LTD B 160000 322.00
NSE Bulk Deals to Watch - July 3 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
3-Jul-08,MVL,MVL Limited,KRUNAL FINVEST- NIKESH NATAVARLAL SHETH,BUY,591000,72.55,-
3-Jul-08,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,2195137,30.33,-
3-Jul-08,ORBITCORP,Orbit Corporation Limited,EVERLONE TRADING PVT. LTD.,BUY,200000,279.55,-
3-Jul-08,PNC,Pritish Nandy Comm. Ltd.,IDEAS.COM INDIA PVT LTD,BUY,192426,45,-
3-Jul-08,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,396934,132.17,-
3-Jul-08,SEJALGLASS,Sejal Architectural Glass,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,BUY,340404,66.49,-
3-Jul-08,SEJALGLASS,Sejal Architectural Glass,B K SHAH CO KETAN BHAILAL SHAH,BUY,147700,66.89,-
3-Jul-08,TRIVENI,Triveni Engineering & Ind,LEHMAN BROTHERS ASIA LTD,BUY,1700000,78.84,-
3-Jul-08,ZENITHINFO,Zenith Infotech Ltd.,ACACIA PARTNERS,BUY,93000,369.99,-
3-Jul-08,MVL,MVL Limited,KRUNAL FINVEST- NIKESH NATAVARLAL SHETH,SELL,558409,74.02,-
3-Jul-08,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,2195137,30.36,-
3-Jul-08,NAGARFERT,Nagarjuna Fert & Chem,SIMPLICITY AB,SELL,2800156,29.98,-
3-Jul-08,ORBITCORP,Orbit Corporation Limited,KBS TRADING PVT LTD,SELL,187571,279.55,-
3-Jul-08,PNC,Pritish Nandy Comm. Ltd.,CHARUSHEELA HANMANTRAO SABALE,SELL,200000,45.03,-
3-Jul-08,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,392646,132.35,-
3-Jul-08,SASKEN,Sasken Commu Techno Ltd,QUEST PORTFOLIO SERVICES PRIVATE LIMITED,SELL,200000,127.68,-
3-Jul-08,SEJALGLASS,Sejal Architectural Glass,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,SELL,340410,66.82,-
3-Jul-08,SEJALGLASS,Sejal Architectural Glass,B K SHAH CO KETAN BHAILAL SHAH,SELL,147702,67.11,-
3-Jul-08,SPICETELE,Spice Communications Limi,HSBC GLOBAL INVESTMENT FUNDS A/C HSBC GLOBAL INVESTMENT FUND,SELL,4259096,72.5,-
3-Jul-08,ZENITHINFO,Zenith Infotech Ltd.,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAPO,SELL,92904,370,-
Post Session Commentary - July 3 2008
The domestic market today crushed badly to gave up all its yesterday’s gains to close in deep red. High oil prices and weak global cues led the market opened on extremely negative note and gave up its yesterday’s gains. The domestic political uncertainty in our country also adds on to the sense of fear among investors. It lost further ground and continued to slip sharply as metal, realty, power, banking, capital goods and oil stocks were getting huge beating on the bourses. BSE Sensex traded around 13,000 points today and NSE Nifty 3,900. All indices closed in red and among those Metal, Capital Goods, Reality and Bank stocks were worst performers as witnessed most of the selling pressure. Reality index slipped over 9% and Metal over 8%. The market breadth was negative as 750 stocks closed in green while 1876 stocks closed in red and 59 stocks remained unchanged.
The BSE Sensex closed lower by 570.51 points at 13,094.11 and NSE Nifty ended down by 167.60 points at 3,925.75. The BSE Mid Caps and Small Cap closed negative with fall of 149.54 points and 157.63 points 5,161.76 and 6,349.17 respectively. The BSE Sensex touched intraday high 13,530.68 of and intraday low of 12,934.92.
Lossers from the BSE are Tata Steel (11.30%), DLF Ltd (9.93%), Reliance Infra (8.72%), ICICI Bank Ltd (7.89%), Reliance Com Ltd (6.91%), ACC Ltd (5.94%), ITC Ltd (5.71), Tata Motors (5.55%) and Grasim Indus Ltd (5.45%).
The Metal index closed down by 1,125.47 points at 12,113.55. Lossers are Gujarat Nre C (13.47%), Tata Steel (11.30%), Steel Authority (9.80%), JSW SL (8.41%), Sterlite In (7.99%) and Ispat Industries (6.59%).
The Reality Index closed lower by 435.97 points at 4,295.22. Lossers are Sobha Dev (10.25%) along with Unitech Ltd (9.99%), DLF Ltd (9.93%), Housing Dev (9.36%), Anant Raj (8.71%) and Indiabulls Real (8.65%).
The Capital Goods index dropped by 310.86 points to close at 10,007.28. Major lossers are Suzlon Energy (10.23%), Punj Lloyd (7.64%), Elecon Eng C (5.33%), Siemens Ltd (4.96), Alstom Proje (3.99%) and L&T Ltd (2.75%).
The Oil & Gas index closed down by 272.82 points at 8,922.47. As Aban Offshore (7.38%), Essar Oil Ltd (7.20%), Reliance Natural Resources (6.17%), Reliance Petroleum (3.81%) and Relaince (3.36%) closed in negative territory.
The Banking index closed lower by 271.84 points at 5,647.79. Lossers are Kotak Bank (11.02%), Karnataka bank (9.28%), Axis Bank (8.82%), Yes Bank (8.12%), ICICI Bank Ltd (7.89%), Kanara Bank (4.12%) and Andhara Bank (4.05%).
The IT index closed down by 139.13 points at 4,038.62. As HCL Techn (7.81%), Moser Bayer (6.41%), Mphasis Ltd (6.17%), NIIT Tech (4.43%), Infosys Tech (4.00%) and NIITB Ltd (4.00%) closed in negative territory.
Market sinks on bear hammering
The market went into a complete tailspin, as the much-awaited correction shaved nearly 700 points off the Sensex during the intra-day trades. Negative global cues like weak asian markets and hike in crude oil prices also contributed to the fall.After resuming on a weak note at 13,531, the market continued to remain negative and remained under the bear hug for the rest of the session. The Sensex nearly slipped below 13,000 towards the close as a wave of selling in heavyweights, realty, metal, power and Bankex stocks saw it slump to an intra-day low of 12,935. The Sensex finally ended 4.18% or 571 points lower at 13,094, while Nifty crashed 168 points to close at 3,926. Among the Asian indices, Nikkei tanked 0.16% (down 21 points) at 13,265, Hang Seng dropped 2.13% (down 462 points) at 21,243 and Kospi was down 1.05% (down 17 points) at 1,607.
The market breadth was extremely negative, Of the 2,683 stocks traded on the BSE, 1,876 stocks declined, 749 stocks advanced and 58 stocks ended unchanged. All the sectoral indices took sharp beatings. The BSE Realty index bore the major brunt and crashed 9.21% at 4,295, while the BSE Metal index, the BSE Power index, the BSE Bankex index, the BSE Teck index and the BSE FMCG index dropped over 4-8% each.
Except SBI & ONGC, all the other 28 stocks in the Sensex pack ended in the red. Among the major losers Tata Steel tumbled 11.30% at Rs650.10, DLF slumped 9.93% at Rs375.05, Reliance Infrastructure crumbled 8.72% at Rs695, ICICI Bank plunged 7.89% at Rs555.55, Reliance Communications dropped 6.91% at Rs381.05, ACC declined 5.94% at Rs470 and ITC fell 5.71% at Rs168. Other frontline stocks also dropped over 2-5% each.
Over 3.59 crore Avon Weigh shares changed hands on the BSE followed by Reliance Natural Resources (2.93 crore shares), IFCI (1.36 crore shares), Reliance Petroleum (1.34 crore shares) and Ispat Industries (1.32 crore shares).
Valuewise, Reliance Capital clocked a turnover of Rs432 crore followed by Reliance Industries (Rs354 crore), Reliance Energy (Rs291 crore), Reliance Petroleum (Rs226 crore) and Reliance Natural Resources (Rs181 crore).
Asian Markets Slide As Crude Oil Breach $ 146 Level
Sensex, Sydney Lead The Fall while Shanghai Stand Aside With Gains
Asian markets were broadly lower as bargain hunters snapped up shares that had been thrashed over the past few sessions. Exporters ranked among the gainers, while banks found buyers in Sydney.
Japan's Nikkei 225 Average briefly crossed into positive territory in the afternoon before slipping back on worries about high crude-oil prices and the health of the U.S. economy. The benchmark average, which slid in the previous 10 sessions for its longest losing streak since 1965, recently fell 0.2% to 13,265.40, after rising as high as 13,325.52. The broader Topix index, meanwhile, fell 0.2% to 1,298.02, after breaking a series of eight sessions fall.
The Crude Oil surged past $145 per barrel for the first time as the weak U.S. dollar and Middle East tension stoke crude oil’s record-breaking run. Brent North Sea crude for August delivery hit $145.11 in early Asian trade, before easing back to $144.90. It had settled at a record $144.26 in London on Wednesday after breaking $144 for the first time.
New York's benchmark contract, light sweet crude for August delivery, hit an intra-day record price of $144.44. By late morning the contract was 70 cents higher at $144.27 against a record close of $143.57 in the U.S. on Wednesday.
The latest surge followed a warning from Iranian Oil Minister Gholam Hossein Nozari that his country, a key crude producer, would react fiercely to any attack against it.
He said oil prices, which have been driven to record levels partly because of fears about the loss of Iran's oil output, would rise radically if Israel or the United States launched a military strike.
In Hong Kong, the benchmark Hang Seng Index fell 2.1% to 21,242.78 and the Hang Seng China Enterprises Index lost 4% to 11,139.92.
The Shanghai Composite rose 2% to 2,703.53 and the Shenzhen All Share index soared 3.4% to 811.76, with both indexes coming off initial declines.
Elsewhere, in Seoul, the Kospi fell 1.1% to 1,606.54 while Thai Set declined by 2.6% to 527.46. New Zealand's NZX 50 index fell 2.2% to 3,094.42 and Taiwan's weighted index gained 0.5% to 7,394.10, while Singapore's Straits Times fell 0.9% to 2,880.45.
India's 30-constituent Sensitive Index, or Sensex, plunged by 4.5% to 13,056.74 and the 50-stock S&P/CNX Nifty also slumped by 4.1% to 3,925.75.
Australia's S&P/ASX 200 shed 1.9% to 4,998.30, dropping below the 5,000-point mark for the first time since September 2006 as series of negative economic news hit the sentiment hard. Starting with activity in Australia's services sector which dived in June as high interest rates and record petrol prices hit consumer and business demand. The Australian Industry (Ai) Group-Commonwealth Bank Performance of Services Index (PSI) fell 4.3 points in June to 45.4, well below the 50 line marking the threshold between expansion and contraction.
In addition to this Australia's seasonally adjusted balance on trade in goods and services swung to deficit of A$965 million in May from a surplus of A$12 million in April. Giving some good news either, new vehicle sales in Australia jumped 6.3 % in seasonally adjusted terms in June, setting the seal on a record fiscal year for sales and suggesting consumers were proving resilient to record petrol prices.
Meanwhile, Indonesia’s Jakarta Composite closed with a fall of 3.9% to 2,286.61 on the screen as Bank Indonesia raised its key interest rate by 25 basis points, the third rate hike by the central bank in three consecutive months, to rein in soaring inflation. The Bank Indonesia i.e. BI rate now stands at 8.75 %, its highest level in 14 months.
According to Bank Indonesia's assessment, the country's consumer inflation is being driven by the impact of the fuel price hike in May. The central bank now expects year-end inflation to hit 11.5 percent to 12.5 percent, much higher than the initial estimate of 5-7 percent, he said.
Indonesia's annual inflation in June accelerated 2.46% - fastest pace since September 2006, driven by higher transportation costs after the government hiked subsidized fuel prices by an average of 28.7% in May. It was up 11.03% from a year ago.
In currency trading, the U.S. dollar bought 106.07 yen in Asia, compared with 106.115 late Wednesday.
On Wall Street, the Dow Jones Industrial Average ended 166.75 points down at 11,215.51 and the S&P 500 index fell 23.39 points to 1,261.52, while the Nasdaq Composite gave up 53.51 points to 2,251.46.
Moving towards European markets, which extended losses backed by gains from banks and miners. The U.K. FTSE 100 index rose 1.4% to 5,558.00, the German DAX 30 index climbed 1.2% to 6,393.55 and the French CAC-40 index advanced 0.8% to 4,376.32
For the region the day started with good news as Euro-zone retail sales rebounded more strongly than expected in May, as sales of nonfood items caused the measure to rise after a record drop on the year in April.
The volume of retail sales rose 1.2% on the month in May. On the year, retail sales rose 0.2% in May, after a record drop of 3.0% on the year in April. Meanwhile, the activity in the euro zone services sector contracted more sharply than previously estimated in June, slumping to its weakest level in five years. The RBS/NTS purchasing managers' index for the services sector slumped to 49.1 in June from 50.6 in May, marking the weakest reading since June 2003.
In UK construction industry continued to feel the bite of the slump in the housing market in the year to May. According to the figures released by office for National Statistics the new construction orders for May fell by 4 % compared May 2007.
Adding more concern was UK's services sector, which accounts for around two thirds of the entire economy, saw activity levels decline at their fastest rate in nearly seven years during June.
The Chartered Institute of Purchasing and Supply said its purchasing managers' index for the sector dropped to 47.1 in June from 49.8 in May. That was the fourth fall in a row and the lowest reading since October 2001, when the world economy was struggling in the wake of the terrorist attacks on the United States.
The German final purchasing managers' index for services came in at 52.1 points, down from 53.8 in May while the French services sector purchasing managers' index for June was revised up to 50.1 from a provisional figure of 49.2, and compared with a reading of 50.5 in May.
The day ahead features some of the most explosive events for the week. Going ahead we have Halfix house price index throwing some light on beleaguered housing market of United Kingdom. It will be followed by ECB interest rate decision followed by Trichet’s statement. In the evening we have series of data from U.S. Starting with average hourly and weekly earning accompanied by continuing and initial jobless claims. However the focus of the evening will be on non-farm payroll for June, which is expected to tank further. It will be accompanied by unemployment rate. In the late evening ISM will release is non-manufacturing indicator for June.
At the closing the time of closing this commentary, Brent North Sea oil for August delivery surged to a life-time peak of $146.34 as the secretary general of OPEC says its difficult to replace the crude output of Iran if the country was attacked.
Sensex sheds 571 points
The strong rebound on the bourses witnessed yesterday, 2 July 2008, proved short-lived as share prices dived once again today. A surge in oil price to a record high above $144 a barrel and overnight fall in US stocks that pushed the Dow Jones Industrial Average to bear market, weighed on the investor sentiment with Sensex falling more than 700 points at one point of time. The Sensex ended just above 13,000 mark while Nifty ended below 4,000 mark. Tata Steel fell more than 11%. European markets were in red.
All the sectoral indices on BSE were in the red. Power, banking realty and metal stocks slumped. The market breadth was weak.
Oil, India's biggest import, rose to a fresh record high above $144 per barrel on Wednesday, 2 July 2008. Oil has risen more than 40% in calendar 2008 so far and it is the key reason for the turmoil of Indian equities. A section of the market reckons that only a sharp fall in oil prices can bring out a meaningful recovery in battered Indian stocks.
In Europe, key benchmark indices in France , UK and Germany were down by between 0.33% to 0.7%. In Asia, key benchmark indices in Singapore, Hong Kong, Japan and South Korea were down by between 0.16% to 2.13%. Key benchmark indices in Taiwan and China were up by between 0.55% to 1.95%.
The Dow Jones Industrial Average sank into a bear market on Wednesday, 2 June 2008, after a report showed US private employers cut the most jobs in nearly six years and oil shot to another record, increasing concerns about the health of the economy and corporate profits. Dow tumbled 166.75 points, or 1.46%, to 11,215.51. The Standard & Poor's 500 Index lost 23.39 points, or 1.82%, to close at 1,261.52, while the Nasdaq Composite Index slid 53.51 points, or 2.32%, to end at 2,251.46.
The 30-share BSE Sensex slumped 570.51 points or 4.18% at 13,094.11. At the day’s low of 12,934.92 Sensex lost 729.7 points in afternoon trade. Sensex was down 133.94 points at the day's high of 13,458.30 hit in opening trade.
The broader based S&P CNX Nifty was down 167.6 points or 4.09% at 3,925.75.
From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 8,112.66 points or 38.25%. It is down 7,192.88 points or 35.45% in calendar year 2008 so far.
There are concerns that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of India Inc. According to Morgan Stanley, net earnings of 30 Sensex firms are expected to grow just 6% in Q1 June 2008 over Q1 June 2007.
The BSE clocked a turnover of Rs 5,585 crore today 3 July 2008 as compared to a turnover of Rs 6,421.03 crore on Wednesday, 2 July 2008.
Nifty July 2008 futures were at 3870, at a discount of 55.75 points as compared to spot closing of 3925.75. NSE's futures & options (F&O) segment turnover was Rs 51,604.28 crore, which was lower than Rs 57,532.76 crore on Wednesday, 2 July 2008.
The market breadth was weak on BSE. 750 shares advanced as compared to 1,876 that declined. 59 remained unchanged. 28 from 30 Sensex stocks were in red.
The BSE Mid-Cap index fell 2.82% to 5,161.76 and BSE Small-Cap index declined 2.42% to 6,349.17. Both these indices outperformed Sensex.
BSE Realty index (down 9.21% at 4,295.22), BSE Metal index (down 8.5% to 12,113.55), BSE Power (down 4.67% to 2,173.63), BSE Bankex (down 4.59% at 5,647.79) underperformed Sensex.
BSE Consumer Durables index (down 1.41% to 3,463.01), BSE Health Care index (down 1.43% at 4,107.58), BSE PSU index (down 2.2% to 5,543.81), The BSE Oil & Gas index (down 2.97% to 8,922.47), The BSE Capital Goods index (down 3.01% at 10,007.28), BSE IT index (down 3.33% to 4,038.62), BSE Auto (down 3.44% at 3,377.76), BSE FMCG index (down 4.03 % to 1,918.61), BSE TecK index (down 4.09% to 2,982.68), outperformed Sensex.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) fell 3.36% to Rs 2,071.10.
India's second largest IT exporter by sales Infosys declined 4% to Rs 1,747.80.
Realty stocks declined. The BSE Realty index was down 9.21% to 4,295.22 and it was the major loser from sectoral indices on BSE. Indiabulls Real Estate (down 8.65% to Rs 261.45), Unitech (down 9.99% to Rs 154) and DLF (down 9.93% to Rs 381.85) edged lower. The BSE Realty index had risen more than 12% in yesterday’s rebound on the bourses.
Metal stocks fell. Tata Steel (down 11.3% to Rs 657.45), Steel Authority of India (down 9.8% to Rs 128), Sterlite Industries (down 7.99% to Rs 658.10), Hindalco Industries (down 4.6% to Rs 135.75), National Aluminium Company (down 2.22% to Rs 341.70) edged lower.
Banking stocks fell ahead of inflation data scheduled at 12:00 IST tomorrow, 4 July 2008. ICICI Bank (down 7.89% to Rs 573.85) and HDFC Bank (down 3.6% to Rs 983.80) edged lower. However, India's biggest commercial bank, State Bank of India gained 0.6% to Rs 1086.
Power stocks fell. Tata Power Company (down 9.03% to Rs 1,000.05), Reliance Infrastructure (down 8.72% to Rs 721.55), NTPC (down 3.91% to Rs 152.55) and Reliance Power (down 1.51% to Rs 130.55) edged lower.
ACC (down 5.94% to Rs 472.30), ITC (down 5.71% to Rs 169.35), Tata Motors (down 5.55% to Rs 390.45), Grasim Industries (down 5.45% to Rs 1,678.15), HDFC (down 5.09% to Rs 1,935.50) edged lower from the sensex pack.
India’s second largest telecom services provider by sales Reliance Communications fell 6.91% to Rs 389.50. It may reportedly partner with a sovereign wealth fund in Middle East and may directly buy a large equity stake in South Africa's MTN, thereby emerging as the single-largest shareholder.
India’s largest state owned oil exploration firm by sales ONGC rose 0.56% to Rs 859.20. As per reports, ONGC sees the cost of replacing its exploration and production infrastructure in the north-eastern state of Assam to double to around Rs 4000 crore due to rising steel prices.
Reliance Natural Resources clocked the highest volume of 2.93 crore shares on BSE. IFCI (1.36 crore shares), Reliance Petroleum (1.34 crore shares), Ispat Industries (1.33 crore shares) and Shree Renuka Sugars (1.32 crore shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 432.06 crore on BSE. Reliance Industries (Rs 354.03 crore), Reliance Infrastructure (Rs 291.72 crore), Reliance Petroleum (Rs 226.35 crore) and Reliance Natural Resources (Rs 181.76 crore) were the other turnover toppers in that order.
Hopes that a political crisis over Indo-US nuclear deal may be avoided triggered a strong rebound on the bourses yesterday, 2 July 2008, with the Sensex surging 703 points, its biggest single day rise in more than three months.
As per media reports, Congress-led United Progressive Alliance (UPA) government may be able to retain power as Samajwadi Party (SP) is likely to provide support to the government at a time when Left parties are on the verge of withdrawing support to the government over Indo-US nuclear deal. SP has 39 seats in parliament, compared with 59 seats for the communist parties. The ruling coalition needs the support of 44 lawmakers to reach a majority and it hopes to also win support from a few smaller parties.
However, in an indication that all's still not well between SP and the UPA government, SP General Secretary Amar Singh today said his party's struggle would continue against the rising prices.
Weak global indices may weigh on sentiment
The market is likely to remain under pressure following an overnight fall on the US market and weakness among major Asian indices in the ongoing trades. Intra-day volatility may also weigh on the sentiment. Among the key local indices, the Nifty has a key support at 4025 and a slip below this level could see it test lower levels around 3995, while on the upside the index could test 4150. The Sensex has a likely support at 13530 and may face resistance at 13875.
US indices fell on Wednesday with the Dow Jones tumbling 167 points to close at 11216. The Nasdaq dropped 54 points at 2251.
Indian floats largely had a mixed outing on the US bourses. VSNL was the major loser and declined by above 2% followed by Tata Motors and Wipro, which lost 2.19% and 1.27% respectively. ICICI Bank, Dr Reddy and Rediff ended with steady losses. Among the gainers, Rediff jumped 6.54% while Infosys, Satyam, HDFC Bank and MTNL ended with steady gains.
Crude oil prices moved up, with the Nymex light crude oil for August delivery rising by $2.60 to close at $143.57 a barrel. In the commodity space, the Comex gold for August 2008 series added $2 to settle at $946.50.
Market may edge lower
The market may edge lower after Wednesday (2 July 2008)’s strong rebound, with oil prices striking a fresh record high and amid subdued trend in global stocks. Hopes that a political crisis over Indo-US nuclear deal may be avoided triggered a strong rebound on the bourses yesterday, 2 July 2008, with the Sensex surging 703 points, its biggest single day rise in more than three months.
As per media reports, Congress-led United Progressive Alliance (UPA) government may be able to retain power as Samajwadi Party (SP) is likely to provide support to the government at a time when Left parties are on the verge of withdrawing support to the government over Indo-US nuclear deal. SP has 39 seats in parliament, compared with 59 seats for the communist parties. The ruling coalition needs the support of 44 lawmakers to reach a majority and it hopes to also win support from a few smaller parties.
Oil, India's biggest import, rose to a fresh record high above $144 per barrel on Wednesday, 2 July 2008. Oil has risen more than 40% in calendar 2008 so far and it is the key reason for the turmoil of Indian equities. A section of the market reckons that only a sharp fall in oil prices can bring out a meaningful recovery in battered Indian stocks. From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7,542.15 points or 35.56%. It is down 6,622.37 points or 32.64% in calendar year 2008 so far.
Asian markets were mostly in red today. Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan were down by between 0.46% to 1.35%. Key benchmark indices in China and Japan were up by between 0.18% to 1.29%.
The Dow Jones Industrial Average sank into a bear market on Wednesday, 2 June 2008, after a report showed US private employers cut the most jobs in nearly six years and oil shot to another record, increasing concerns about the health of the economy and corporate profits. Dow tumbled 166.75 points, or 1.46%, to 11,215.51. The Standard & Poor's 500 Index lost 23.39 points, or 1.82%, to close at 1,261.52, while the Nasdaq Composite Index slid 53.51 points, or 2.32%, to end at 2,251.46.
Foreign funds sold shares worth a net Rs 668.43 crore on Wednesday, 2 July 2008, provisional data released by stock exchanges showed.
There are concerns that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of India Inc. More clarity on the impact of weak macroeconomic environment on earnings of India Inc. will emerge when company managements give outlook for the current fiscal years at the time of announcement of Q1 June 2008 results this month.
The advance tax payment by the Indian corporate sector this year so far has been strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year.
A good news on the inflation front is that ‘near normal’ rains this year will bolster farm production which in turn may help rein in inflation. The Indian Meteorological Department (IND), in its long-range forecast update for the 2008 southwest monsoon, has maintained that rainfall for the country as a whole is likely to be near normal. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average.
Pre Session Commentary - July 3 2008
The Indian Market is expected to have negative opening on the back of weak global cues, along with concern for rising oil prices and high inflation worries. On Wednesday, the Indian market closed with handsome gains tracking cues from the European markets, which gave a ray of hope to the investors to book their positions. Market opened on positive note backed by the mixed global cues but was not able to sustain the momentum and soon turned down. Further, it was volatile till mid session and took sharp turn to recover since afternoon. The BSE Sensex bounced back by crossing the 13,650 level mark and NSE Nifty above 4,050, as both rallied more than 5% in a day. From the sectoral front Metal, Capital Goods, Reality, Oil & Gas and Bank stocks posted decent gains while FMCG counter was out of favor due to the selling pressure. The unexpected rush for key stocks of Realty index had sustained up the BSE Realty index with an impressive advance of 12%. The BSE Sensex closed higher by 702.94 points at 13,664.62 and NSE Nifty ended up by 196.60 points at 4,093.35. We expect that market may decline during the trading session.
US markets closed lower on Wednesday as oil prices soared above $144.27 a barrel on the New York Mercantile Exchange and General Motors faced further questions over its liquidity. The Dow Jones Industrial Average (DJIA) closed lower by 166.75 points at 11,215.51 along with NASDAQ down by 53.51 points to close 2,251.46 and S&P 500 dropped by 23.39 points to close at 1,261.52.
Indian ADRs ended mixed. In technology sector, Patni Computers ended up by (6.54%) along with Infosys by (0.30%) and Satyam by (0.04%) while Wipro dropped by (1.27%). In banking sector, ICICI bank decreased by (0.22%) while HDFC bank gained (1.79%) respectively. In telecommunication sector, MTNL advanced by (0.73%) while Tata Communication reduced by (2.36%). Sterlite industries declined (0.90%).
Today the major stock markets in Asia are trading down on signs of further deterioration in the US economy and fresh record highs of oil prices. Hang Seng index is trading lower by 238.89 points at 21,456.56 along with Taiwan Weighted trading down by 143.81 points at 7,210.05 while Japan’s Nikkei trading at 13,277.18 with a fall of 9.19 points.
The FIIs on Wednesday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs3,151.10 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,976.90 Crore and gross debt sold stood at Rs197.80 Crore. Therefore, the net investment of equity reported was Rs174.20 Crore and net debt was (Rs197.80) Crore.
Today, Nifty has support at 3,978 and resistance at 4,161 and BSE Sensex has support at 13,174 and resistance at 13,911.
Daily Call - July 3 2008
Though we had advised covering shorts on Wednesday morning in anticipation of a sharp bounce back, which eventually materialised in the form of a 700 point rally in the Sensex, but the basic reason why the markets have fallen since May remains intact even today. Crude continued to climb further as it closed at $143.57 and touched $144 in the electronic trade.
If Crude continues to climb, inflation will be higher, even if we do not raise petroleum product prices. That makes the Friday inflation number redundant. The ongoing truckers strike, if allowed to continue beyond 4-5 days will further add to inflation, could effect industrial production numbers, raise default for truck financing companies and hit truck sales. There are some positives for the market if SP jumps on the UPA bandwagon, but that is counting the chickens before they hatch. Chop those realty stocks and don’t let the buyback trick fool you.
Morning Call - July 3 2008
Market Grape Wine :
In House :
Nifty at a support of 4008 and 3946 with resistance at 4150 and 4223 levels.
Cash: Buy RELIANCE above 2100 TGT 2160 with S/L 2075.
Cash Buy RPL above 168 TGT 176 with S/L 164.
Future: Sell REL INFRA below 802 TGT 750 with S/L 825
Future: Sell NEVELI below 105 TGT 95 with S/L 110.
Out House:
Markets at a support of 13254 & 13425 resistance at 13786 & 13939 levels .
Buy : Infy at dips
Buy : Suzlon at dips
Buy : Tisco
Buy : RIL & RPL
Buy : ZeeLtd
Buy : HLL
Buy : ITC
Dark Horse : RIL , Infy , Tisco , HLL , ITC & RPL
Trading Calls - July 3 2008
Nifty (4093) Sup 4010 Res 4155
Buy NTPC (159) SL 155
Target 165, 167
Buy Satyam (464) SL 458
Target 475, 480
Sell HPCL (177) SL 182
Target 169, 166
Sell Kotak Bank (482) SL 488
Target 469, 466
Buy Chennai Petro (277) SL 272 Target 286, 290
What a dream!
Without leaps of imagination, or dreaming, we lose the excitement of possibilities. Dreaming, after all, is a form of planning.
Wednesday’s wonderful run may seem like a dream as bulls wake up to a new day. But plans of continuing the up-move could go awry. Crude oil rose to a new all-time high of $144.44 per barrel and may well flirt with the US$150 mark. US stocks had another bad day overnight, as did markets in Europe and other emerging economies. Asia too is weak this morning. FIIs continue to sell. The only positive is that SP could bail the Government out on the Indo-US nuclear deal.
Against this backdrop, and after yesterday's steep jump, we expect the main indices to soften a little bit. Thereafter, the direction would hinge on global factors, particularly on the European markets. The European Central Bank (ECB) is all set to hike rates today to contain inflation. We will also have the US jobs report later in the day. And, of course there is oil, which will continue to dampen sentiment. If the ECB indeed raises rates, the euro will strengthen against the dollar, which may push oil further up.
After a stellar rally, which took most market players by surprise, the bulls were hoping to extend the advance. Especially after being dominated by the bears for most part of the year so far. Some technical analysts suggest that good times may return soon. Their contention is that the Nifty rebounded from a level which marked 50% correction from the lows of May 2004, when the current bull run began.
There's a view among some market experts that the selloff has been overdone and valuations are reasonable. However, when the market faces a slew of headwinds (both local and global) its difficult to digest such theories. Some may argue that the negatives are well known for quite a while. But, the fact remains that they are still very much in place and things could get worse before they start turning better.
FIIs were net sellers of Rs6.68bn (provisional) yesterday even as the Sensex and the Nifty rallied by over 5% each. Local institutions pumped in Rs4.21bn. In the F&O segment, the foreign funds were net buyers of Rs16.87bn. On Tuesday, FIIs were net buyers of Rs1.74bn in the cash segment.
Andrew Yule, Hikal and Prism Cement will declare their results today while Avon Weighing Systems Ltd. will make its stock market debut.
US stocks ended sharply lower on Wednesday, with the Dow and Nasdaq ending in bear market territory on the back of record high crude oil prices, a big slump in GM and nervousness ahead of the jobs report and ECB rate decision.
The S&P 500 slid to its lowest since July 2006 as crude climbed above $144 a barrel. GM shares plunged 15%, to touch a 54-year low after Merrill Lynch warned that bankruptcy is not impossible for the world's No.1 automaker.
Nucor Corp. led the steepest decline in steel shares since 2002 on mounting concerns that the slump in the auto industry will reduce demand and the government said metal orders decreased. Peabody Energy, the largest US coal producer, slid as European prices fell the most since 2005.
The Dow nose-dived 166.75 points, or 1.5%, to 11,215.51. The S&P 500 plunged 23.38 points, or 1.8%, to 1,261.53, extending its 2008 loss to 14%. The Nasdaq Composite Index slid 53.51 points, or 2.3%, to 2,251.46.
More than five stocks fell for each that rose on the New York Stock Exchange.
Both the Dow and the Nasdaq closed at levels that meet the technical definition of a bear market i.e. a drop of at least 20% off the highs. The Nasdaq previously fell into bear market territory in March, when it fell 24% off its highs.
All US financial markets will close early on Thursday and are closed on Friday for the "Fourth of July" holiday.
August crude oil futures set a record high at $144.44 per barrel in extended New York trading after a US government report showed that crude supplies fell last week. It was last trading up 81 cents at $144.38 a barrel.
Crude supplies declined by 2mn barrels to 299.8mn for the week ended June 27, the Energy Information Administration reported. The decline came as refiners used more crude oil to boost production of petroleum products.
The national average price for a gallon of regular unleaded gas rose to a record $4.092 from the record $4.087 the previous day, according to AAA.
In currency trading, the dollar fell versus the euro and the yen. In the bond market, Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.97% from 4.00% late on Tuesday. COMEX gold for August delivery rose $2 to settle at $946.50 an ounce.
Factory orders rose 0.6% in May, after rising a revised 1.1% in April. That was above economists' forecasts for a rise of 0.5%.
Private sector employment slumped in June, with employers cutting 79,000 jobs from their payrolls after adding a revised 25,000 in May, according to payroll services firm ADP. Economists expected employers to cut 20,000 jobs.
Microsoft has approached other media companies about the possibility of partnering to buy Yahoo's search business, according to a Wall Street Journal report. News Corp. and Time Warner were among the companies approached, the paper said. In May, Microsoft abandoned its $47.4 billion bid for Yahoo.
Blockbuster said its withdrawing its more than $1 billion bid for Circuit City because of poor market conditions. UnitedHealth Group warned that 2008 profit won't meet previous forecasts due to higher costs and weaker business.
Starbucks said late on Tuesday that it will close 600 stores, or 8.5% of its 7,100 stores, expanding an initial plan to close 100 stores.
After the close, Nvidia warned that current-quarter sales won't meet forecasts due to slower global demand. The graphics chipmaker also warned that its gross margin won't meet forecasts. Shares slumped 20% in after-hours trade.
European markets finished lower ahead of an expected rate hike by the ECB. The pan-European Dow Jones Stoxx 600 index lost 0.8% to 280.69, extending the 2.2% loss made on Tuesday. The UK's FTSE 100 closed down 1% at 5,426.30, while Germany's DAX 30 fell 0.2% to 6,305.42 and the French CAC-40 lost 1% to 4,296.48.
Jean-Claude Trichet and fellow members of the ECBs rate-setting governing council are most likely to announce a quarter-percentage-point increase in the euro-zone's key interest rate today.
Inflation pressures have mounted in the eurozone, with annual consumer inflation hitting 4% in June, more than double the ECB's target of just less than 2%. ECB's official lending rate is at 4%.
Brazilian and Mexican stocks slid to their lowest levels in more than three months. Brazil's Bovespa stumbled 3.6% to 61,106.22. Mexico's IPC index fell 1.8% to 28,680.83 yesterday.
In other emerging markets, the RTS index in Russia rose 0.6% to 2255 while the ISE National-30 index in Turkey gained 1.6% to 40,376.
Indian bourses snapped a four day losing streak as a sudden burst of short-covering and bargain hunting at lower levels in late afternoon trade saw the benchmark index to close above the 4,050mark.
It was a highly volatile session with benchmark indices witnessing wild gyrations throughout the trading session. Finally, the BSE benchmark Sensex surged 702 points to close at 13,664 and the Nifty index was up 196 points to close at 4,093.
ACC ended lower by half a percent to Rs502. The company announced in the month of June, the cement production was 1.75mn tonnes and cement despatches was 1.79mn tonnes as compared to cement production of 1.70mn tonnes and Cement despatches of 1.70mn tonnes in June 2007.
In June 2008, the cumulative cement production was 10.57mn tonnes and cement despatches: 10.61mn tonnes as compared to cement production of 10.21mn tonnes and Cement despatches of Rs10.2 mn tonnes.
ABB gained by over 3.5% to Rs798 after the company on Tuesday announced that it secured order worth Rs3.1bn from IGIA, Delhi. The scrip touched an intra-day high of Rs825 and a low of Rs711 and recorded volumes of over 9,00,000 shares on NSE.
Akruti City surged by over 19% to Rs799 after the company posted a net profit of Rs2992.692mn (up 287%) for the year ended March 31, 2008 as compared to Rs772.220mn for the year ended March 31, 2007.
Total Income increased from Rs1985.842mn for the year ended March 31, 2007 to Rs47045.557mn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs800 and a low of Rs625 and recorded volumes of over 71,000 shares on NSE.
Glenmark Pharma advanced by 3.5% to Rs629 after the company announced that it established a new company in Poland and has acquired a product portfolio of 7 established brands. The scrip touched an intra-day high of Rs639 and a low of Rs606 and recorded volumes of over 1,00,000 shares on NSE.
Sobha Developers surged by over 5.4% to Rs277. The company announced that Dubai’s Pan Atlantic would invest US$10mn in Sobha’s India Project and would hold 40% in the project. The scrip touched an intra-day high of Rs288 and a low of Rs244 and recorded volumes of over shares 1,00,000 on NSE.
FDC gained by a percent and half to close at Rs25after the company announced that it has secured USFDA approval for Ciprofloxacin Ophthalmic. The scrip touched an intra-day high of Rs25 and a low of Rs23 and recorded volumes of over 1,00,000 shares on NSE.
Sterlite Industries spurted by over 6% to Rs715 after reports stated that Asarco LLC, a U.S.-based bankrupt copper producer, may sell its assets to Sterlite for at least US$2.6bn in an auction this year. The scrip touched an intra-day high of Rs722 and a low of Rs655 and recorded volumes of over 4,00,000 shares on NSE.
Bharti Airtel in talks to acquire Kuwaiti Telecom major, Zian a US$5.9bn company. (FE)
RCOM may buy stake in MTN directly, likely to float a SPV for buying stake. (ET)
Reliance Power Ltd claims that it would expedite the commissioning of the six units of its Sasan ultra mega power project by 16 to 36 months. (BL)
US bankruptcy judge allows Asarco's parent Grupo Mexico to come up with a revival package, a setback to Sterlite’s US$2.6bn bid. (BS)
Sterlite to get break–up fees if Asarco bid fail. (ET)
NTPC and PFC have entered into a memorandum of agreement for financing NTPC’s ongoing capacity addition program across the country. (BL)
Foreign firms like Ineos and Mitsui in the race for equity stake in ONGC's Dahej project. (BS)
Holcim, though its investment subsidiary Holderind Investment and Ambuja Cement, has acquired 4.62% stake in ACC by way of creeping acquisition. (BL)
HPCL proposes to develop bio-fuels for aircraft engines, namely bio-jet, from ethanol, bio-diesel and bio-butanol through a collaborative R&D project. (FE)
Citra Developers Ltd, a 100% subsidiary of Indiabulls Real Estate, has withdrawn its Rs6.8bn bid for 134 acre PAL-Peugeot land in Dombivli Kalyan. (BL)
ABB has won Rs3.1bn order for a new terminal T3 at Indira Gandhi International Airport in Delhi. (BL)
Reliance ADAG group has picked by 26% stake in Riyada, a Saudi Arabia based financial services company. (ET)
Tata’s likely to cut Nano publicity on rising costs. (ET)
Dabur India increases 5% prices across most product categories.
The Bajaj family plans to sell its 69.49% stake in Hercules Hoists for over US$100mn. (BS)
Minister’s panel to hasten NTPC’s troubled Rs87bn Barh Stage I project.(ET)
Essar Steel compensated with US$45.3mn for withdrawing its bid for US steel maker Esmark. (BS)
IFC to invest in port management company Ocean Sparkle. (TOI)
Sobha Developers received US$10mn in FDI from Pan Atlantic of Dubai as investment in the SPV created to build a residential project. (BS)
Videocon to buyout majority stake in Archies. (ET)
BGR Energy Systems Ltd bagged an order worth Rs31bn from the Tamil Nadu Electricity Board to construct a 600MW thermal power plant in Tamil Nadu. (BS)
EMCO plans to set-up 600MW coal plant in Chhattisgarh. (ET)
Aurobindo Pharma is setting up a formulation unit in Saudi Arabia in a joint venture with a local company. (BL)
Piramal Healthcare acquires PlasmaSelect AG a Germany based company. (FE)
Glenmark Pharmaceuticals has inked a deal with Iceland’s Actavis and its Polish affiliate Biovena to acquire seven pharmaceutical brands in Poland. (BL)
Piramal Healthcare buys global rights on Haemaccel. (BL)
Solar Semiconductor signs US$1.2bn delivery pact with SolarWorld. (BL)
Vijay Mallya may acquire a stake in SpiceJet. (TOI)
PSL lines up US$60mn capex and is raising its Sharjah unit capacity. (BL)
Economic Front Page
The Centre has decided to initiate decontrol of the sugar industry from the new crushing season, beginning October. (BL)
The Government may ease service tax norms for truckers. (BS)
The Karnataka government set to scrap Rs300bn petroleum, chemicals and petrochemicals investment region (PCPIR) project. (BS)
The steel ministry has summoned steel producers to discuss retail prices and export figures. (BS)
PF Act likely to cover firms with 10 employees. (BL)
The soaring global food prices will adversely impact government finances in countries like India, says S&P. (FE)
The Government to liberalizing the 10% mandatory cap on price hike of drugs outside the price control. (ET)
India to have 737mn mobile users by 2012, says Gartner. (ET)
3G spectrum auctions not before the year end. (TOI)
There is no threat from Blackberry services, says Telecom Secretary Siddharth Behura. (FE)
Today's Pick - Indian Hotels
We recommend a buy in Indian Hotels Company from a short-term perspective. From the charts of Indian Hotels Company, we note that the stock has been on a downward trend from its 52-week high of Rs 177, marked in early January 2008.
In late June, the stock penetrated a key support level of Rs 100 and witnessed a steep decline. However, this decline halted at around Rs 75 (which is also the low recorded in June 2006) and bounced by surging 6 per cent, accompanied with heavy volume on July 2.
We also notice a formation of a bullish engulfing candlestick pattern at this support level of Rs 75. The daily relative strength index of the stock has reversed after touching the oversold 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 90 in the approaching trading sessions. Traders with the short-term perspective can buy the stock while maintaining stop-loss at Rs 75.
via BL
Nifty futures at a discount
Turnover rises
Nifty July 2008 futures were at 4074, at a discount of 19.35 points as compared to spot closing of 4093.35. NSE's futures & options (F&O) segment turnover was Rs 57532.76 crore, which was higher than Rs 47969.8 crore on Tuesday, 1 July 2008.
Reliance Industries July 2008 futures were at premium at 2158 compared to the spot closing of 2144.
DLF July 2008 futures were at discount at 422.25 compared to the spot closing of 423.45.
Reliance Petroleum July 2008 futures were at premium at 176.10 compared to the spot closing of 174.45.
In the cash market, the S&P CNX Nifty soared 196.60 points or 5.05% at 4093.35.
Bullion metals continue to shine
Gold and silver prices continue to rise as dollar slumps against the euro
Bullion metals once again ended higher today, Wednesday, 02 July, 2008. Prices rose due to the declining dollar and the rising crude prices. The dollar fell to a two month low against the euro today. Gold erased earlier losses after a government report showed U.S. crude-oil inventories unexpectedly fell last week. The increase in energy costs generally increase demand for the precious metal as a hedge against inflation. Silver prices also rose.
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 $2 (0.2%) to close at $946.5 ounce on the New York Mercantile Exchange. Last week, on Thursday, 26 June, prices surged by more than 3.5%. That was the biggest one day percentage gain for a most-active contract since June, 2006. Last week gold prices ended higher by $27.6 (3.1%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
Gold prices ended June, 2008 with a gain of 4.1%. The yellow metal ended second quarter with a marginal gain of 0.7% yesterday. Last month, in May, it ended with a gain of higher by $22.5 (2.5%). Before May, for April, prices closed lower by 6.3%.
This year, gold prices have gained 13% till date against a 9% drop for the dollar against the euro. 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 Wednesday, Comex silver futures for September delivery rose 13.5 cents (0.7%) to $18.425 an ounce. Silver has gained 22.6% in 2008 till date and half of it in the past five sessions. For the second quarter, it gained a paltry 1.4%.
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 Wednesday, the dollar slipped after a survey based on a sampling of ADP payrolls data showed private-sector firms in the U.S. shed a projected 79,000 jobs in June, in what would be the biggest monthly loss since November 2002. The dollar index which measures the greenback against a basket of six major currencies, was last at 72.052 compared with 72.374.
Last week, Federal Reserve yesterday sharpened its focus on inflation, saying that the upside risks to inflation have increased. Fed held its target for short-term interest rates steady at 2%.
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. Gold gained 38% from 17 Sept as the Fed slashed rates from 5.25%. All eyes will be on the ECB on Thursday, 3 July, 2008 looking to see what the board will do with interest rates. The European Central Bank is widely expected to raise its key lending rate by a quarter of a percentage point, to 4.25%.
In the crude market on Wednesday, crude oil futures rose to a record above $144 a barrel in New York after a U.S. government report showed an unexpected decline in inventories. Crude oil for August delivery rose $2.60 (1.8%) to settle at $143.57 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 lower by Rs 24 (0.2%) at Rs 13,183 per 10 grams. Prices rose to a high of Rs 13,227 per 10 grams and fell to a low of Rs 13,000 per 10 grams during the day’s trading.
At the MCX, silver prices for July delivery closed Rs 96 (0.4%) higher at Rs 25,371/Kg. Prices opened at Rs 25,101/kg and rose to a high of Rs 25,450/Kg during the day’s trading.
Crude at all time high
Prices continue to go up as crude supplies fell last week
The weekly inventory report by the Energy Department pushed crude prices to a new all time high mark today, Wednesday, 02 July, 2008. Crude futures also rose today as the dollar fell. EIA reported today that crude supplies fell last week.
Crude-oil futures for light sweet crude for August delivery today closed at $143.57/barrel (higher by $2.6/barrel or 1.8%) on the New York Mercantile Exchange. Prices rose to a high of $144.33 in electronic trading post trading hours. Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Last week, crude prices closed higher by 3.6%. Prices are 107% higher than a year ago. For the year, crude is up by 45.5% till date.
EIA reported today that crude supplies declined by 2 million barrels to 299.8 million for the week ended 27 June. But the same report also showed that refinery utilization climbed to 89.2% compared with 88.6% of capacity a week earlier. According to the EIA data, crude inventories have now fallen during six of the past seven weeks. They are reportedly at near the lower boundary of the average range for this time of year.
EIA also reported that motor gasoline supplies rose 2.1 million barrels to 210.9 million barrels. It reported a climb of 1.3 million barrels in distillate stocks to total 120.7 million barrels for the latest week.
At the currency markets on Wednesday, the dollar slipped after a survey based on a sampling of ADP payrolls data showed private-sector firms in the U.S. shed a projected 79,000 jobs in June, in what would be the biggest monthly loss since November 2002. The dollar index which measures the greenback against a basket of six major currencies, was last at 72.052 compared with 72.374.
Brent crude oil for August settlement today rose $3.59 (2.6%) to $144.26 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 declined as speculators sold positions after a price gain of 78% this year, which outpaced the rise in crude oil. Natural gas for August delivery fell 16.1 cents (1.2%) to $13.344 per million British thermal units.
Against this backdrop, gasoline futures for August delivery rose 3.6 cents (1%) to settle at a record $3.5494 a gallon. Heating oil futures for August delivery gained 12.8 cents (3.3%) to $4.0715 a gallon in New York. The contract reached a record $4.0925.
Yesterday, the IEA (International Energy Agency) said in a report that spare OPEC capacity will shrink by 2013, keeping the market tight. In its Medium-Term Oil Market Report today, IEA reported that OPEC spare capacity will rise from 2.5 million barrels a day in 2008 to more than 4 million a day in 2010 before fading to negligible levels of around 1 million barrels a day by 2013.
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