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Wednesday, April 14, 2010
Precious metals shed some glaze
Prices turn pale in tandem with lower crude prices
Precious metal prices ended lower on Tuesday, 13 April 2010. Prices fell as traders mulled over the fact that precious metals' recent rally was overdone and hence many traders made their exit out of commodities. Prices ended lower in tandem with slipping crude prices.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Tuesday, gold for June delivery ended at $1,153.4 an ounce, lower by $8.8 (0.8%) an ounce on the New York Mercantile Exchange. During intra day trading, gold reached a low of $1,145.4. The yellow metal had hit fresh four-month high level yesterday. Last week, gold ended higher by 3.2%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 5.3%.
On Tuesday, May Comex silver futures ended lower by 17 cents (0.9%) at $18.24 an ounce. Last week, silver gained 2.6%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 7%.
In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies remained relatively steady. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.5% this year till date.
In the crude market on Tuesday, oil prices pared losses to settle at $84.01 per barrel, down 0.4%. Oil prices had been down some 2% at their session low.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
At the MCX, gold prices for June delivery closed lower by Rs 105 (0.62%) at Rs 16,801 per ten grams. Prices rose to a high of Rs 16,887 per 10 grams and fell to a low of Rs 16,725 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 158 (0.56%) lower at Rs 27,689/Kg. Prices opened at Rs 27,805/kg and fell to a low of Rs 27,402/Kg during the day's trading.
Crude drops for fifth straight day
Prices manage to recover from their intra day lows
Crude oil prices dropped for the fifth straight day on Tuesday, 13 April 2010. Prices dropped as some traders anticipated that tomorrow's weekly inventory report would show substantial rise in crude inventories. But, prices managed to recover from their intra day lows.
On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $84.05/barrel (lower by $0.29 or 0.3%). During intra day trading, prices fell to a low of $82.5. Last week, crude ended higher by just 0.6%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 5.8%.
Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 155% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40.
In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies remained relatively steady. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.5% this year till date.
Market is expecting tomorrow's weekly inventory report to show that crude stockpiles will increase by 1.6 million barrels, while gasoline stocks will be down by 1.26 million barrels for last week. Distillates stocks, which include heating oil and diesel, are expected to be up by 1 million barrels.
In its monthly report, the Paris-based IEA revised higher by 30,000 barrels a day its forecast for global oil demand in 2010. Oil demand is now estimated to grow by 1.7 million barrels a day to 86.6 million barrels a day this year.
Among other energy products, gasoline for May delivery posted a slight gain, up a penny, or 0.6%, to settle at $2.30 a gallon. Heating oil for May delivery, however, ended 0.2% lower at $2.21 a gallon.
Elsewhere, natural gas for May delivery added 15 cents, or 3.8%, to end at $4.16 per million British thermal units.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for April delivery closed lower by Rs 20 (0.53%) at Rs 3,738/barrel. Natural gas for April delivery closed at Rs 183.6/mmbtu, higher by Rs 6.4 (3.6%).
SJVNL IPO likely to hit the market on 29 April 2010
Govt to divest its stake through the IPO
State-run hydro power generator Satluj Jal Vidyut Nigam's (SJVNL) initial public offering (IPO) to raise about Rs 1200 crore is likely to open on 29 April 2010, reports citing the company's chairman & managing director H K Sharma said. The IPO will close on 2 May 2010, reports added.
The company will reportedly file the draft red herring prospectus (DRHP) for the IPO in the forthcoming week.
The Cabinet Committee on Economic Affairs (CCEA) on 8 April 2010 approved a proposal to increase the equity stake of the Himachal Pradesh government in SJVNL by 0.5%. The state now owns 25.5% equity stake in SJVNL, while the balance is held by the Centre.
Earlier in October 2009, SJVNL had received approval from the Cabinet for 10% disinvestment of the government's stake in the company.
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