Thursday, December 04, 2008
Inflation for the week ended November 22 stood at 8.4 per cent, as compared to 8.84 per cent in the previous week. It was 3.11 per cent during the corresponding week last year.
However, annual rate of inflation for primary articles, which includes food articles too, increased to 11.98 per cent in the reporting week, as against 11.9 per cent in the previous week.
But the index number for the other two categories declined on a week-on-week basis, reflecting overall fall in prices of commodities in fuel and manufactured products.
The final estimate of inflation for the week ended September 27 is revised upwards to 12.08 per cent, as against 11.8 in the provisional estimate.
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
4/12/2008 524804 AUROBINDO PH FIDELITY FUNDS EMERGING MARKETS FUND S 510000 111.97
4/12/2008 530309 CHAND PRAB I PIYUSH JAIN B 23348 4.00
4/12/2008 533026 CHEMCEL AMI STOCK SHARE BROKERS PLTD S 140000 2.63
4/12/2008 522163 DIAMON CABLE DIAMOND PROJECTS LTD B 115000 95.00
4/12/2008 522163 DIAMON CABLE CLEARWATER CAPITAL PARTNERS SCYPRUS LIMITED S 115000 94.99
4/12/2008 526285 DIVYAJYO IND SARVESHVAR RATANJI RATHI S 92000 6.75
4/12/2008 526285 DIVYAJYO IND DWARKA DAS RATHI S 92000 6.73
4/12/2008 514308 HANJER FIBRE BHARAT EQUITY SERVICES LTD B 69793 1.52
4/12/2008 514308 HANJER FIBRE HIREN KIRIT GANDHI S 69793 1.52
4/12/2008 530255 KAY POW PAP PARKASH CHAND GUPTA S 57578 8.68
4/12/2008 500307 NIRLON LTD MATTERHORN VENTURES B 750000 22.99
4/12/2008 500307 NIRLON LTD KAMPILYA INVESTMENTS PVT LTD B 753755 22.99
4/12/2008 500307 NIRLON LTD CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 1500000 23.00
4/12/2008 590077 RANKLIN SOLU VENKATA RAGHAVANAGAR ANJANEYA B 34176 53.36
4/12/2008 530461 SABOO SOD CH BALAJI CORPORATION B 77000 9.58
4/12/2008 530461 SABOO SOD CH INKAM FINVEST PVT.LTD B 50000 9.30
4/12/2008 530461 SABOO SOD CH BALAJI CORPORATION S 77000 9.70
4/12/2008 524703 SANDU PHARMA AMI STOCK SHARE BROKERS PLTD S 40000 7.75
4/12/2008 526885 SARLA PER F HINDUSTAN COTTON COMPANY B 40000 40.00
4/12/2008 526885 SARLA PER F COPTHALL MAURITIUS INVESTMENT LIMITED S 60210 40.00
4/12/2008 531574 VAS INFRA MAVI INVESTMENT FUND LTD S 87905 7.99
4/12/2008 531574 VAS INFRA LOTUS GLOBAL INVESTMENTS LTD S 106520 7.99
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
04-DEC-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,126941,2180.58,-
04-DEC-2008,HDIL,Housing Development and I,KOTAK MAHINDRA(UK)LTDA/C SANDSTONE CAPITAL INDIA MASTER FUND,BUY,1585000,88.59,-
04-DEC-2008,IBREALEST,Indiabulls Real Estate Li,KOTAK MAHINDRA(UK)LTD SANDSTONE CAPITAL INDIA MASTER FUNDLTD,BUY,1630000,104.68,-
04-DEC-2008,KOHINOOR,Kohinoor Foods Limited,TEMPTATION FOODS LTD,BUY,160000,74.47,-
04-DEC-2008,TAKE,Take Solutions Limited,PASSPORT CAPITALL LLC A/C PASSPORT INDIA INVEST (MAURITIUS),BUY,697121,17.90,-
04-DEC-2008,UNITECH,Unitech Ltd,TOTAL SECURITIES LIMITED,BUY,9746666,28.60,-
04-DEC-2008,AUROPHARMA,Aurobindo Pharma Ltd.,Fidelity Funds - Emerging Markets,SELL,515245,111.53,-
04-DEC-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,126941,2180.91,-
04-DEC-2008,TAKE,Take Solutions Limited,SRINGARAVALLI CONSULTANTS PVT LTD,SELL,600000,18.00,-
04-DEC-2008,UNITECH,Unitech Ltd,TOTAL SECURITIES LIMITED,SELL,9769166,28.61,-
The domestic market today reported handsome gains due to the further fall in inflation numbers to 8.40% for the week ended 22nd November 2008 that raised strong hopes of rate cut. Market is also expecting around Rs.15,000 crore by the government to support infrastructure sector along with measures for the housing, auto and export sectors. Benchmark indices sparked mostly after mid session on strong buying interest. Positive cues from the equity markets across Europe also added to the sentiments. BSE Sensex breached 9,000 mark and extended gains to more than 5%. Along with this, NSE Nifty extended gains to more than 4% and crossed 2,700 level
Market opened slightly higher but suddenly turned choppy. Further market managed to gain ground and took sharp turn form days low on strong buying witnessed among the selective scrips. Stocks extended their gains and continued to add momentum on eased inflation and hopes of stimulus package. From the sectoral front, all indices ended in green and Realty stocks were back in action as ended with increase of more than 12% on expectaion of stimulus package for the sector as the sector was severely hit by the effect of financial crisis and high interest rates. Apart from that, most of the buying was seen in Metal, Capital Goods, Oil & Gas, Power, Bank and PSU stocks. Midcap and Smallcap stocks were also on buyers radar.
Among the Sensex pack all 30 stocks ended in green territory. The market breadth was positive as 1503 stocks closed in green while 668 stocks closed in red and 60 stocks remained unchanged.
The BSE Sensex closed higher by 482.32 points at 9,229.75 and NSE Nifty ended up by 131.55 points at 2,788. The BSE Mid Caps and BSE Small Caps ended with gains of 92.21 and 66.70 points at 2,992.80 and 3,331.80 respectively. The BSE Sensex touched intraday high of 9,245.06 and intraday low of 8,726.71.
Gainers from the BSE Sensex pack are Tata Steel (13.84%), JP Associates (13.77%), Tata Motors (13.29%), DLF Ltd (11.28%), Sterlite Industries (9.90%), ICICI Bank (8.75%), Reliance (8.40%), L&T Ltd (8.32%), Reliance Infra (7.46%),BHEL (6.93%), HDFC (6.76%), ACC Ltd (6.60%), SBI (6.55%) and Tata Power (5.57%).
There is no loser from the BSE Sensex pack.
Inflation rate stood at 8.40% for the week ended November 22 2008, against 8.84% in the previous week. Inflation slipped for the fourth week in a row due to a fall in prices of petroleum fuels. The decline has raised hopes for further cut in key rates by the RBI. The annual inflation rate was 3.11 percent during the corresponding week the previous year.
The government is expected to reveal a motivation package on December 07 2008, for housing, auto and export sectors and announce Rs 15,000 crore as budgetary support for infrastructure sector. The package may include a Rs 2,000 crore package for exporters, cut in excise duty on commercial vehicles and line of credit for housing and auto.
The BSE Reality index ended higher by (12.44%) or 193.96 points at 1,753.65. Major gainers are Anant Raj (20.00%), Housing Dev (18.47%), Orbit Co (18.20%), Unitech Ltd (15.46%), Parsvnath (12.46%) and Housing Dev (11.28%).
The BSE Metal index surged (7.93%) or 352.87 points to close at 4,803.91. Gainers are JSW Steel (19.50%), Tata Steel (13.84%), Welspan Gujarat SR (11.33%), Sterlite Industries (9.90%), Steel Authority (9.03%) and Jai Corp Ltd (6.27%).
The BSE Capital Goods index went up by (6.91%) or 420.40 points to close at 6,506.98. Gainers are Suzlon Energy (10.24%), Praj Industries (8.93%), L&T Ltd (8.32%), Usha Martin (7.95%), Alstom Proje (7.72%) and Walchand In (7.27%).
The BSE Oil & Gas index advanced by (5.86%) or 314.77 points to close at 5,682.68. Major gainers are Reliance (8.40%), Reliance Natural Resources (6.60%), Aban Offshore (3.60%), ONGC Ltd (3.48%), Cairn Ind (3.40%) and Reliance Petroleum (3.37%).
The BSE Power index gained (5.70%) or 90.38 points to close at 1,676.43 as GMR Infra (12.08%), Suzlon Energy (10.24%), Lanco Infra (10.08%), Reliance Infra (7.46%), BHEL (6.93%) and Crompton Greaves (6.30%) ended in green.
The BSE Bank index ended up by (5.64%) or 256.36 points at 4,803.37 as Yes Bank (10.91%), ICICI Bank (8.75%), Kotak Bank (8.01%), Indus Ind Bank (7.38%), SBI (6.55%) and Axis Bank (5.14%) ended in positive territory.
The market wiped out losses of over 20 points incurred in the first half, after a strong bout of buying led by Tata Motors, JP Associates and Tata Steel triggered wide-spread buying. In a highly volatile trading session, the Sensex resumed 32 points higher at 8,779, but soon turned negative following weakness in global indices and crashed to the day's low of 8,727 on relentless selling. While the market was on a recovery path thereafter, the Sensex witnessed a sharp turnaround in afternoon, as gains in heavyweights, realty, metal and capital goods stocks propelled it to an intra-day high of 9,245. After gyrating 518 points during the intra-day trades, the Sensex gained 482 points to close at 9,230, while Nifty ended 132 points higher at 2,788.
The market breadth ended Positive. Of the 2,231 stocks traded on the BSE 1,503 stocks advanced, 668 stocks advanced and 60 stocks ended unchanged. All sectoral indices ended in the positive territory. The BSE Realty led the pack and gained 12.44% followed by BSE Metal (up 7.93%), BSE CG (up 6.91%), BSE Oil & Gas (up 5.86%) and BSE Power (up 5.64%).
Tata Motors was the star performer among the heavyweights and the stock soared 13.44% at Rs151.10. Among the other major gainers, JP Associates advanced 12.42% at Rs185.15, DLF jumped 11.93% at Rs214.80, Sterlite Industries rose 8.38% at Rs253.50, ICICI Bank moved up by 8.38% at Rs362.95, Reliance Industries advanced 8.37% at Rs1,159 and Larsen & Toubro added 7.95% at Rs745. While the rest of Sensex stocks ended positive.
Realty stocks were in demand and scaled higher. Anant Raj soared 20% at Rs58.50, HDIL flared up 18.47% at Rs92.35, Orbit added 18.20% at Rs46.75, Indiabulls Real Estate gained 17.17% at Rs109.85, Unitech, Parsvnath and DLF were up 11-15% each. In metal pack, JSW zoomed 19.50% at Rs219.35, Tata Steel shot up by 13.84% at Rs187.50, Welspun rose 11.33% at Rs87.95 and SAIL gained 9.90% at Rs70.60.
Over 3.19 crore Unitech shares changed hands on the BSE followed by Suzlon Energy (2.46 crore shares), GVK Power & Infrastructure (1.81 crore shares), HDIL (1.10 crore shares) and JP Associates (0.82 crore shares).
Likely government measures to pump prime the economy, hopes of a further cut in interest rates, firm European stocks and rebound in US index futures boosted the domestic bourses today. The BSE 30-share Sensex jumped 482.32 points, or 5.51%, led by a surge in realty, metal, banking shares and index heavyweight Reliance Industries (RIL). The barometer index breached the psychological 9,000 mark. All the sectoral indices on BSE were in the green.
Bank shares were in demand on as falling inflation heightened expectations for an interest rate cute by the Reserve Bank of India (RBI). As per the market buzz, the Reserve Bank of India (RBI) is expected to cut repo and reverse repo rates to the extent of 200 basis points and 125 basis points respectively at the weekend, in an attempt to shield the domestic economy from the global economic slowdown. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.
Inflation based on the wholesale price index rose 8.4% in the year through 22 November 2008, lower than previous week's 8.84% rise, data released by the government at about 13:15 IST showed. Inflation had surged into double digits in early June this year after an increase in state-set retail fuel prices, and peaked at 12.91% on, 2 August 2008, the highest reading since annual numbers in the current data series became available in April 1995.
Reserve Bank of India (RBI) governor D Subbarao today, 4 December 2008, said India remains vulnerable to global financial and economic developments and a period of painful adjustment was inevitable. The RBI governor said India's economic fundamentals were strong. He added that the outlook for India was mixed and there was evidence of activity slowing down.
Meanwhile, the Indian government is slated to announce a slew of measures at the weekend to pump prime the economy. The likely measures include a Rs 2000-crore export package, a further relaxation in external commercial borrowings norms and Rs 15,000-crore budgetary support for infrastructure.
A bout of volatility was witnessed earlier in the day. Likely government measures to pump prime the economy and hopes of further rate cuts by the Reserve bank of India gave a positive start to the domestic bourses. But the market soon slipped into the red due to lower US index futures, concerns about the weakening global economy and due to tension between Indian and Pakistan following last week's terror attacks in Mumbai may cap the upside. The market firmed up again in early trade. After the recovery, the market pared gains before bouncing back again. Sensex swung 518.35 points between the day's high and low.
European stocks reversed early losses to rally on Thursday, 4 December 2008, rising for the third session in a row as investors hoped deep interest rate cuts would help soothe the global economic slump. The key benchmark indices in France, Germany and UK were up by between 0.54% to 2.62%.
The Bank of England slashed interest rates by a full percentage point today to shore up Britain's crumbling economy and head off the threat of deflation. The cut took rates to 2% their lowest level since 1951. The central bank in Sweden slashed its key interest rate by a record 175 basis points to 2% on Thursday, a shock move to try and prevent the economy from sliding deeper into recession.
At its policy meeting later in the day, the European Central Bank (ECB) is expected to cut rates by at least 75 basis points.
Meanwhile, economic, corporate and industry data continues to be weak in major economies. Japan said on Thursday, 4 December 2008, it may be in a deeper recession than first thought, in the latest signal that the global economic downturn is sparing few corners of the world. Earlier, a corporate survey in Japan signaled the country's economic performance in the third quarter may have been even worse than first reported. Australia's vehicle sales slumped in November 2008.
US data on Wednesday, 3 December 2008, showed large job losses by US employers and a slumping service sector. The US economy is already in recession for a year.
Swiss Bank Credit Suisse today, 4 December 2008, reported a net loss of about 3 billion Swiss francs ($2.5 billion) in the two months to end-November 2008 and cut another 5,300 jobs.
Trading in US index futures indicated the Dow could rise 23 points at the opening bell. The US index futures bounced back from steep losses earlier in the day.
Closer home, the Indian government is reportedly considering various options including a strike on Pakistan to dismantle its terror bases in response to the recent Mumbai terror attacks. As a strike on Pakistan could lead to a full scale war between the two nuclear armed countries, India is maintaining a cautious approach and wants to gauge every possible ramification of its decision, reports suggest.
Tension between India and Pakistan have mounted after the Mumbai attacks. India has blamed Islamist militants based in Pakistan for the attacks.
The BSE 30-share Sensex was up 482.32 points, or 5.51%, to 9,229.75. At the day's high of 9,245.06 hit in late trade, the Sensex rose 497.63 points. The Sensex lost 20.72 points at the day's low of 8,726,71 hit in early trade.
The S&P CNX Nifty was up 131.55 points, or 4.95%, to 2,788.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,503 shares rose as compared with 668 that declined. 60 shares remained unchanged.
The BSE clocked a turnover of Rs 3727 crore today, higher than Rs 2,955.08 crore on Wednesday, 3 December 2008.
Nifty December 2008 futures were at 2796, at a premium of 8 points as compared to the spot closing of 2788. Turnover in NSE's futures & options (F&O) segment rose to Rs 34,123.92 crore from Rs 33,606.23 crore on Wednesday, 3 December 2008.
The barometer index BSE Sensex is down 11,057.24 points or 54.5% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,977.02 points or 56.47% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Realty index (up 12.44% to 1,753.65), the BSE Metal index (up 7.93% to 4,803.91), the BSE Capital Goods index (up 6.91% to 6,506.98), the BSE Oil & Gas index (up 5.86% to 5,682.68), the BSE Power index (up 5.7% to 1,676.43), the BSE Bankex (up 5.64% to 4,803.37) outperformed the Sensex.
The BSE HealthCare index (up 0.92% to 2,849.12), the BSE Consumer Durables index (up 1.21% to 1,734.53), the BSE IT index (up 2.69% to 2,464.74), the BSE FMCG index (up 2.8% to 1,954.75), the BSE Auto index (up 3.22% to 2,243.11), the BSE Teck index (up 3.32% to 1,982.39) and the BSE PSU index (up 3.71% to 4,667.57), underperformed the Sensex.
As per the provisional data on BSE, foreign institutional investors (FIIs) bought shares worth Rs 307.14 crore today, 4 December 2008 and domestic funds bought shares worth Rs 79.24 crore.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) surged 8.4% to Rs 1,159.30 on recent reports it intends to restart retailing of petrol and diesel soon after margins on the two fuels turned positive.
Realty stocks rose on reports the government will next week unveil measures for the realty sector, which may include incentives for low-cost housing and lower loan rates. Indiabulls Real Estate, DLF, Unitech rose by between 11.28% to 17.17%.
Metal stocks rebounded from earlier slide on recovery in metal prices on the London Metal Exchange (LME). Tata Steel, Hindalco Industries, Sterlite Industries, Steel Authority of India, National aluminum Company rose by between 2.65% to 13.84%.
Banking stocks edged higher on rate cut hopes. India's largest private sector bank by net profit ICICI Bank rose 8.75% as American depository receipt (ADR) gained 5.64% on Wednesday, 3 December 2008. India's largest commercial bank State Bank of India (SBI) jumped 6.55%. India's second largest private sector bank by net profit HDFC Bank gained 3.52% as ADR rose 2.6% on Wednesday.
Shares of housing finance firms rose on likely sops for the realty sector, which may include incentives for low-cost housing and lower loan rates. India's top mortgage lender by market capitalisation Housing Development Finance Corporation (HDFC) rose 6.76% and India's second-biggest mortgage lender by market capitalisation LIC Housing Finance rose 10.37%.
Infrastructure Development Finance Company jumped 14.29% after a block deal of 17.01 lakh shares was executed on BSE at Rs 58.50 per share.
Indian Overseas Bank rose 3.04% after a block deal of ten lakh shares was executed on BSE at Rs 67 per share.
IT stocks shrugged off a stronger rupee after India's second largest IT exporter by sales Infosys' chief executive S. Gopalakrishnan today, 4 December 2008, said though the company has seen delays in orders there is no change in its third quarter December 2008 guidance. Infosys rose 3.12%, recovering from a 4.29% fall in the previous trading session.
India's fourth largest IT exporter by sales Wipro gained 4.71% as ADR rose 1.95%. India's third largest IT exporter by sales Satyam Computer Services rose 1.04% as ADR gained 2.43% on Wednesday, 3 December 2008. India's largest IT exporter by sales Tata Consultancy Services rose 2.82%.
The Indian rupee was stronger in afternoon trade on Thursday as hefty gains in the domestic share market raised expectations of fresh capital inflows while a drop in oil prices also eased concerns of a widening trade deficit. The partially convertible rupee was at 49.78/80 per dollar, stronger than its Wednesday's close of 49.99/50.01. On Tuesday, the rupee had hit a record low of 50.65. A stronger rupee affects IT firms negatively as they earn most of their revenues from exports.
Auto stocks rose on hopes lower interest rates will spur demand which is mainly driven by finance and on possible measures by the government to boost the commercial vehicles sector. Mahindra & Mahindra, Maruti Suzuki India and Hero Honda Motors rose by between 0.56% to 4.74%.
India's largest commercial vehicle maker by sales Tata Motors up 13.29% on reports of possible excise duty cut on commercial vehicles as a part of the government's package to boost the economy.
Capital goods stocks rose on hopes government efforts to boost economy will lift orders. Larsen & Toubro, Suzlon Energy, Bharat Heavy Electricals, Crompton Greaves and Thermax rose by between 2.87% to 10.24%.
Power stocks rose on reports the likely government measures to boost the economy may include special credit window for the power sector. Tata Power Company, Reliance Infrastructure, Reliance Power, Power Grid Corporation of India jumped by between 3.21% to 7.46%.
India's largest drug maker by sales Ranbaxy Laboratories rose 3.57% on signing a pact with a US drug firm.
Orchid Chemicals & Pharmaceuticals rose 2.51% on receiving US approval for a new drug.
Infrastructure stocks extended gains for the second day in a row on hopes a likely government package to boost the economy will give thrust to the infrastructure sector. Hindustan Construction Company, Nagarjuna Construction Company, and IVRCL Infrastructure & Projects rose by between 5.46% to 11.88%.
Marg was locked at 5% upper limit at Rs 34.45 at 12:54 IST on BSE, on bagging a contract for developing an airport at Bijapur in Karnataka.
PSU OMCs rose on fall in crude oil prices. BPCL, HPCL and Indian Oil Corporation rose by between 0.66% to 1.28%. Crude oil fell for a fifth day to the lowest in almost four years after a report showed US fuel demand extended declines because of the country's deepening economic slump. Crude oil for January 2008 delivery dropped as much as $1.49, or 3.2%, to $45.30 a barrel on the New York Mercantile Exchange. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Hindustan Oil Exploration Company rose 6.12% on bagging two oil and gas blocks.
Consumer durables stocks rose on hopes further rate cuts by the Reserve Bank of India would spur demand which is mainly driven by finance. Videocon Indusries, Blue Star,Titan Industries, Lloyd Electric and Rajesh Exports rose by between 1.52% to 3.56%.
Cement stocks rose on hopes likely government measures to boost the infrastructure sector will spurt demand. ACC, Birla Corporation of India, Ultratech Cement, Ambuja Cements and Grasim Industries rose by between 1.13% to 6.6%.
Unitech clocked the highest volume of 3.19 crore shares on BSE. Suzlon Energy (2.46 crore shares), GVK Power & Infrastructure (1.82 crore shares), Housing Development & Infrastructure (1.1 crore shares) and Jaiprakash Associates (82.64 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 404.61 crore on BSE. State Bank of India (Rs 203.61 crore), Educomp Solutions (Rs 178.33 crore), Reliance Infrastructure (Rs 153.18 crore) and DLF (Rs 132.49 crore) were the other turnover toppers in that order.
Haldyn Glass Gujarat spurted 8.51% on increase in the promoters' stake in the company.
Nava Bharat Ventures jumped 20.28% on share buyback plan.
PVR galloped 4.88% on reports it plans to set up entertainment centres across the country.
Chinese stocks rose after the government on Wednesday, 3 December 2008, announced measures whereby it will use financial policy to support the economy. The Shanghai Composite was up 1.84%. But most Asian shares weakened after earlier gains. Key benchmark indices in South Korea, Hong Kong, Japan and Taiwan were down by between 0.58% to 1.58%.
China will make use of required reserves as well as interest rates and the exchange rate to ensure ample liquidity in the banking system, the government said on Wednesday. The State Council, China's cabinet, also approved measures aimed at stabilising the domestic stock market, boosting bond issuance and increasing the supply of credit.
Investors with a short-term trading perspective can consider selling Cipla stock. It is clearly visible from the charts of Cipla that after recording a 52-week low of Rs 146 in late October, it was on a medium-term up move. This up move of the stock retraced approximately 61 per cent (fibonacci retracement level) of its prior downtrend, which began from the August high of Rs 243.
The stock encountered resistance at around Rs 205 for the second time in November. We notice that the stock has formed a bearish engulfing candlestick pattern at this significant resistance level recently, indicating selling pressure and resumption of the downtrend. Both daily and weekly relative strength indices are declining in the neutral region towards the bearish zone.
The stock is currently trading below its 21-day moving average. We are bearish on the stock from a short-term perspective. We anticipate the stock to decline until it hits our price target of Rs 164 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 193.
Strong dollar decreases their appeal
Rising dollar decreased the appeal of the bullion metals and the same fell on Wednesday, 03 December, 2008. Gold and silver prices fell due to the strong dollar. 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 and also vice versa.
On Wednesday, Comex Gold for February delivery fell $12.8 (1.6%) to close at $770.5 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (26%) since then. Last week, gold prices ended higher by 3.1%. For the month of November, gold prices ended higher by 14%.
Prior to this, for the month of October, gold had ended lower by 18%. It was the biggest percentage loss for gold since February, 1983.
This year, gold prices have lost 8.4% till date. Futures have averaged $882 in 2008. The dollar index has gained 11% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Wednesday, Comex silver futures for December delivery fell 3 cents (0.3%) to $9.59 an ounce. Last week, silver gained 7.5%. For the month of November, silver prices gained 5%. Till date, silver has lost 34% this year.
For the month of October, silver had slipped by 20%. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.
At the currency market on Wednesday, the dollar strengthened against the euro and the British pound on expectations for big rate cuts by the European Central Bank and the Bank of England.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the latest move, the Federal Reserve has cuts its target bank lending rate to 1% from 5.25% in September, 2007. The Fed did it in eight steps.
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. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for February delivery closed lower by Rs 129 (1%) at Rs 12,478 per 10 grams. Prices rose to a high of Rs 12,627 per 10 grams and fell to a low of Rs 12,422 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 72 (0.42%) lower at Rs 16,676/Kg. Prices opened at Rs 16,708/kg and fell to a low of Rs 16,488/Kg during the day's trading.