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Tuesday, May 18, 2010
Tarapur Transformers tumbles on debut
Settles at Rs 56.90 on BSE
Tarapur Transformers settled at Rs 56.90 on BSE, a discount of 24.13% to the initial public offer price of Rs 75 per share.
The stock debuted at Rs 75. The stock hit a high of Rs 97.50 and a low of Rs 54.10. On BSE, 6.35 crore shares were traded on the counter.
The current price of Rs 56.90 discounts the company's year ended March 2009 EPS of Rs 1.1, by a PE multiple of 51.72. The company had priced its IPO at the top end of the Rs 65-75 per share initial public offer (IPO) price band.
The IPO of Tarapur Transformers closed on 28 April 2010 with a subscription of 1.74 times. The qualified institutional buyers category was subscribed a mere 0.03 times, non institutional investors category was subscribed 5.07 times and retail individual investors (RIIs) category was subscribed 2.73 times.
The proceeds of the IPO will be utilized mainly for expansion and modernization of a manufacturing unit at Pali in Maharashtra and to part-finance an acquisition.
Tarapur Transformers is engaged in manufacturing, rehabilitation, up-gradation, and refurbishment of transformers.
Tarapur Transformers reported net profit of Rs 1.55 crore on sales of Rs 22.88 crore for the nine months ended December 2009.
L&T May 2010 futures at discount
Turnover declines
Nifty May 2010 futures were at 5,064.80, at a discount of 1.40 points compared to spot closing of 5,066.20. Turnover in NSE's futures & options (F&O) segment was Rs 94,575.29 crore, lower than Rs 1,14,072.51 crore on Monday, 17 May 2010.
Larsen & Toubro (L&T) May 2010 futures were at discount at 1655.60 compared to the spot closing of 1660.
JSW Steel May 2010 futures were near spot price at 1148.95 compared to the spot closing of 1150.
State Bank of India May 2010 futures were near spot price at 2281 compared to the spot closing of 2280.35.
In the cash market, the S&P CNX Nifty rose 6.30 points or 0.12% at 5,066.20.
Indian indices dance to global tunes
Today's major news
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Click here for more stories
Global signals
European stocks edge higher on Tuesday with banks and commodity stocks gaining, after a rally on the Wall Street and on hopes that Euro zone finance ministers are making progress with details of a rescue package. FTSE 100 was trading higher by 0.97%.
All the major Asian indices closed in the positive territory except Kospi that closed lower by 0.50%. SGX Nifty closed mere one point higher.
US stock futures signal higher opening on the Wall Street. Investor keep an eye on earnings of Wal-Mart Stores and Hewlett-Packard, and data related to producer price index, housing starts and permits for the month of April.
Indian indices
The Indian indices had made a subdued start and then traded negative for quite some time. Late recovery made by Asian markets, positive opening in European markets and gains in US index futures, helped to recover morning losses and end the choppy session with marginal gains.
Mirroring Asian cues, the 30-share benchmark index , Sensex started the session marginally higher by mere 5 points at 16840, soon turned negative and remained in red zone through out the morning session. The Sensex touched the day's low of 16744. However, in afternoon session, late recovery in Asian markets, positive opening in European markets, and buying in consumer durables and capital goods stocks led to an intraday recovery, which helped the Sensex to turn positive and touch the day's high of 17000. However, the Sensex was not able to sustain that level and latter lost the momentum due to selling pressure in metal stocks and heavyweight like ICICI Bank. At finishing line, the Sensex and the Nifty managed to close in green. The Sensex ended the day 40 points higher at 16876 and the Nifty signed off 6 points higher at 5066.
Market sentiment
The market breadth was positive as advancing stocks outnumbered trailing stocks. Of the 2,925 stocks traded on the BSE, 1,643 stocks advanced, whereas 1,180 stocks declined. Hundred and two stocks closed unchanged.
Sectoral & stock screening
Capital goods (CG) and consumer durable (CD) stocks witnessed some investor interest, with the BSE CG and BSE CD up by 1.62% and 1.50% respectively. Metal stocks have been under pressure for some days, with BSE Metal down by 1.91% for the day. The rest of the sectors were either marginally up or down.
Among 'A' group stocks: Top gainers' were - star stock for the day was Federal Bank that was up by 5.01%, followed by BEML that surged by 4.82% and Sintex Industries that rose by 4.29%. Top losers' were - Rolta India slid the most by 5.36%, followed by Sesa Goa that fell by 5.10% and Hindustan Zinc that shed 3.91%.
Viewing volumes
Anil Dhirubhai Ambani Group company Reliance Natural Resources continued to see highest trading with over 0.47 crore shares changing hands on the BSE, followed by wind turbine major Suzlon Energy (0.40 crore shares), India's second largest developer Unitech (0.33 crore shares), India's leading steel maker Tata Steel (0.31 crore shares) and infrastructure firm IVRCL Infrastructure and Projects (0.30 crore shares).
Asian markets eke out small gains
Euro surges above 1.2400 after tumbling to four year lows yesterday
Asian stocks eked out small gains as risk appetite continued to assist sentiments after the steep losses for the world equities in the last few days. The overnight US cues were flat but the Asian investors eyed an impressive intraday recovery in Dow, which rallied primarily on upbeat data about the housing sector. US Home-builder sentiment rose in May to the highest level in nearly 33 months, boosted by a homebuyer tax credit and strengthening economy, the National Association of Home Builders started yesterday. The commodity prices also rebounded today, as the Euro ticked above 1.2400 mark and supported resources.
Japanese market ended slightly higher. Benchmark Nikkei-225 Index ended in green while the broader Topix Index ended in negative territory with modest losses. Positive closing on Wall Street in the previous session and modest recovery in Euro against the yen attracted buying interest in select stocks, while the fear continues to haunt investors, who have moved to sidelines awaiting more cues. The benchmark Nikkei 225 Index rose 6.88 points, or 0.1%, to 10,243, while the broader Topix index of all First Section issues slipped 6.52 points, or 0.7%, to 914.
On the economic front, results of a monthly survey conducted by Cabinet Office revealed that consumer confidence in Japan improved to 42.1 in April from 41 reported in the previous month. The results further noted that households' consumer confidence rose to 42 in April from 40.9 reported in March. Both the indices matched economists' forecast. Among the sub-indices of households' consumer sentiment, overall livelihood climbed to 42.4 from 41.2. Income growth and employment rose to 40.4 and 38.3, respectively.
In a separate report, the Ministry of Economy, Trade and Industry revealed that an index measuring tertiary industry activity in the country declined a seasonally adjusted 3.0% in March, coming in at 95.5. That was sharply lower than forecasts that had called for a 1.2 % contraction following the 0.2 % decline in February.
The Australian stocks mixed, finding buying interest as the Australian interest rates appeared to be "well placed for the present," as noted in the latest minutes of the Australian central banks. Following the decision this month to hike rates for the third time this year, the Reserve Bank of Australia noted that members judged it to be prudent to undertake some further monetary tightening at this meeting. The benchmark S&P/ASX200 Index added 3.50 points, or 0.08% to 4,470, while the All-Ordinaries Index ended at 4,500, representing a loss of 0.70 points, or 0.02%.
The minutes of the recent monetary policy meeting of the Reserve Bank of Australia revealed that members of the policy board felt that a rate increase was warranted given a faster than expected pick up in inflation and improving economic conditions. The members also hinted that the tightening cycle might now be heading for a pause with interest rates around average levels. The Reserve Bank board saw the decision to raise the cash rate by a quarter %age point to 4.50% to be "prudent". The board noted that, "if lenders responded as expected to another rise in the cash rate, interest rates faced by most borrowers would then be at around their average levels over the past decade".
In a separate report, the Housing Industry Association and the Commonwealth Bank revealed that housing affordability in the country continued to fall in early 2010. According to the data, home affordability fell 4% in the March quarter compared to the December quarter, and on annual basis, down 28.7% from the same quarter last year. On a quarterly basis, housing affordability was down by 4.2% in the capitals and by 5.3% in regional areas, the data further revealed.
Chinese markets jumped on bargain hunting. China's key stock index ended 1.4 % higher, bouncing from a fresh one-year intraday low hit during as property and banking stocks staged a technical rebound. The Shanghai Composite Index closed at 2,594.8 points, rebounding from Monday's 5 % slide, its biggest one-day %age drop in more than eight months, as retail investors fled the market. The property sub-index jumped 5.6 %.
In Mumbai, the strength in small cap stocks made markets turn around from early lows. The BSE 30-share Sensex was up 44.30 points or 0.26% to 16,879.86 by the close. The Sensex rose 164.78 points at the day's high of 17,000.34 in afternoon trade. The index fell 91.13 points at the day's low of 16,744.13 in early trade. The S&P CNX Nifty was up 7.50 points or 0.15% to 5,067.40 as per provisional figures
In other markets, Hong Kong's Hang Seng added 1.17%, Singapore's Straits Times edged up 0.38% while Taiwan's TSEC ended down 0.18%.
The risky assets drove higher with steady gains in crude oil and copper today. US stock futures are indicating that the DOW could open as high as 46 points. Crude oil added tremendous gains, as traders flocked to the commodity after prices briefly fell under $70 per barrel mark yesterday. Light sweet crude oil futures for June delivery trade $71.91 a barrel in electronic trading, up $1.83 per barrel from previous close at $70.08 a barrel in New York on Monday.
Small-cap, mid-cap indices outshine Sensex
The key benchmark indices eked out small gains in choppy trading session, tracking higher European stocks and gains in US index futures. Index heavyweights Reliance Industries (RIL) and Larsen & Toubro pared gains in late trade. Consumer durables, capital goods and IT stocks gained. Oil exploration stocks rose as crude oil prices rebounded from 5 month lows. Auto stocks were mixed. Metal stocks fell.
The market breadth was strong as buying was witnessed in mid-cap and small-cap stocks. The BSE 30-share Sensex rose 40.20 points or 0.24%, up close to 125 points from the day's low and off about 130 points from the day's high.
Volatility was high right from the onset of the trading session. The market edged lower in early trade on weak Asian stocks. The market cut losses in morning trade after hitting a fresh intraday low. The market weakened once again after turning positive for a brief period in mid-morning trade when it hit a fresh intraday high. The market hit a fresh intraday high in early afternoon trade. Gains in European stocks pushed the market further higher, with the Sensex kissing the psychological 17,000 level in afternoon trade. The market came off the higher level amid intense volatility in mid-afternoon trade.
NSE's volatility index India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, declined 2.32% to 26.54. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days
European stocks gained on Tuesday, led by banks and miners as euro zone debt worries eased following a meeting of the region's finance ministers during which they played down differences on how a massive bailout plan should be deployed. Key benchmark indices in UK, France and Germany rose by 0.86% to 1.52%.
Chinese stocks led a recovery Asian stocks which moved between positive and negative zone on Tuesday. The key benchmark indices in China, Japan, Singapore Hong Kong and Indonesia were up by between 0.07% to 1.36%. But, the key benchmark indices in South Korea and Taiwan fell by between 0.18% to 0.50%.
Asia's strong growth outlook and prospects for better returns will lift capital inflows into the region but that could increase appreciation pressure on currencies which may require authorities to impose capital controls, a report from Asian Development Bank said.
The Reserve Bank of India (RBI) governor D Subbarao on 11 May 2010 said India prefers long-term capital inflows to short-term flows and non-debt flows to debt flows. There is no proposal to impose a Tobin type tax to rein in excessive capital inflows, the RBI governor said. However, it needs reiterating that no policy instrument is clearly off the table and the choice of instruments will be determined by the context, Subbarao added.
But, worries over fiscal problems in southern Europe triggered outflow from China and India funds during the week ended 12 May 2010. As a result, Asia funds, excluding Japan, saw only $27 million inflows, their worst week in well over a year, as per data from global fund tracker EPFR Global.
US index futures edged higher in volatile trade, reversing initial losses. Trading in US index futures indicated that the Dow could gain 46 points at the opening bell on Tuesday, 18 May 2010.
US stocks staged a comeback in late trading on Monday as bargain hunters snapped up beaten-down shares, setting aside concerns that efforts to tackle the euro-zone debt crisis could stifle the global economy. The Dow Jones Industrial Average edged up 5.67 points, or 0.05% to end at 10,625.83. The Standard & Poor's 500 Index added 1.26 points, or 0.11% to 1,136.94. The Nasdaq Composite Index rose 7.38 points, or 0.31% to close at 2,354.23.
Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 2,078 companies rose 24.2% to Rs 54,530 crore on 25.3% rise in sales to Rs 5,53,114 crore in the quarter ended March 2010 over the quarter ended March 2009.
On the macro front, while the headline inflation declined to 9.59% in April 2010 from 9.9% rise in March 2010, the data for February 2010 was revised upwards to 10.06% from provisional figure of 9.89%, the latest government data showed. The RBI has forecast the headline inflation to ease to 5.5% at end-March 2011 on expectations of a normal monsoon.
The latest economic data showed industrial output rose lower than expected 13.5% in March 2010. The growth was also slower than February's 15.1% expansion. Manufacturing sector output rose 14.3% in March 2010. Industrial output rose 10.4% in the 2009/10 fiscal year, faster than the 2.6% growth clocked in the previous fiscal year.
The India Meteorological Department (IMD) said on Monday, 17 May 2010, that conditions are favourable for further advance of monsoon over more parts of Bay of Bengal and remaining parts of Andaman during next 48 hours. The southwest monsoon has set over the Andaman and Nicobar islands and some parts of southeast Bay of Bengal.
The IMD expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
The RBI expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.
The BSE 30-share Sensex rose 40.20 points or 0.24% to 16,875.76. The Sensex rose 164.78 points at the day's high of 17,000.34 in afternoon trade. The index fell 91.13 points at the day's low of 16,744.13 in early trade.
The S&P CNX Nifty rose 6.30 points or 0.12% to 5,066.20.
The BSE Mid-Cap index rose 0.42%. The BSE Small-Cap index rose 0.71%. Both the indices outperformed the Sensex.
Sectoral indices on BSE were mixed. BSE Capital Goods index (up 1.62%), Consumer Durables index (up 1.5%), FMCG index (up 0.73%), Oil & Gas index (up 0.71%), and BSE PSU index (up 0.33%), outperformed the Sensex. BSE IT index (up 0.14%), Power index (down 0.1%), Healthcare index (down 0.1%), banking sector index Bankex (down 0.21%), Auto index (down 0.44%), Realty index (down 0.55%), and Metal index (down 1.91%), underperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1637 shares advanced as compared to 1199 shares that declined. A total of 89 shares were unchanged.
From the 30 share Sensex pack, 19 stocks gained, while others fell.
BSE clocked turnover of Rs 3909 crore, lower than Rs 3987.71 crore on Monday, 17 May 2010.
Index heavyweight Reliance Industries (RIL) rose 0.39% to Rs 1020.70 on bargain hunting after last three days' losses. The stock was volatile. It hit a high of Rs 1033.45 and a low of Rs 1009. RIL has agreed with Russia's Sibur to set up a joint venture in India to make butyl rubber amid rising demand from the auto industry. As per the agreement, butyl rubber will be produced at RIL's integrated petrochemical site in Jamnagar.
The RIL stock had surged early this month, boosted by after a favourable ruling in the Supreme Court on gas dispute with Anil Ambani controlled Reliance Natural Resources (RNRL). The Supreme Court ordered the two firms to renegotiate a deal based on government policy on gas utilization.
Earlier, the Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.
Oil exploration stocks rose as oil regained $70 a barrel level after hitting a five-month low the previous day on concerns about the health of the global economy. US crude for June delivery rose 2.58% to $71.89 in Asian electronic trading. Cairn India rose 0.64%. India's largest oil & gas exploration firm by sales ONGC rose 2.22%. India's second largest oil & gas exploration firm by sales Oil India rose 0.42%. Rise in crude oil prices would result in higher realizations from crude sales.
India's largest cellular services provider by sales Bharti Airtel rose 0.47%, with the stock gaining for the second straight day on bargain hunting after recent sharp fall triggered by telecom regulator Telecom Regulatory Authority of India (Trai)'s recommendation that telecom firms pay a one-time fee for holding radio-spectrum beyond 6.2 mega hertz (MHz) based on 3G prices.
Bharti Airtel said the telecoms regulator's proposals on allocation of second-generation (2G) spectrum are shocking, arbitrary and retrograde and are against all existing global norms for spectrum allocation. The company said it was confident that the Department of Telecommunications (DoT) and that the government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations.
India's second largest listed cellular services provider by sales Reliance Communications (RCom) rose 2.4% on bargain hunting. The stock had lost 2.01% on Monday on weak financial performance. Consolidated net profit declined 22.99% to Rs 4655 crore in the year ended March 2010 over the year ended March 2009. The company announced the result on Saturday, 15 May 2010.
At the time of announcing the results, chairman Anil Ambani said RCom will be able to sustain profitable growth in the coming quarters despite a highly competitive environment.
Metal and mining stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, plunged 5.96% on Monday, 17 May 2010. Hindustan Zinc, Jindal Steel & Power, Sterlite Industries, Tata Steel, Jindal Saw, Hindalco Industries, Steel Authority of India, Sesa Goa, fell by between 0.6% to 5.1%.
Auto shares were mixed. India's top truck maker by sales Tata Motors fell 2.21%, with the stock falling for the third straight day. The company's global vehicles sales rose 53% to 77,732 units in April 2010 over April 2009. Global sales include that of Jaguar and Land Rover brands, which rose 61% to 17,909 vehicles. The figures were announced on 14 May 2010.
India's largest tractor maker by sales Mahindra & Mahindra rose 0.36%, rebounding after last two days losses.
India's largest small car maker by sales Maruti Suzuki India was flat. Maruti's total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,034 units. The data was unveiled on 1 May 2010.
Car sales in India rose an annual 39.5% to 143,976 cars in April 2010 over April 2009, data from the Society of Indian Automobile Manufacturers (SIAM) showed. Sales of trucks and buses, a barometer of economic activity, rose 64.5 % to 49,086 units in April 2010 over April 2009, SIAM said.
Bajaj Auto rose 0.86%, rebounding after last two days' losses. The stock hit a record high of Rs 2219.90 in intraday trade on Friday, 14 May 2010, boosted by strong Q4 results. Net profit surged 306% to Rs 528.65 crore in Q4 March 2010 over Q4 March 2009. The company announced result during market hours on Wednesday, 12 May 2010.
India's largest engineering and construction firm by sales Larsen & Toubro rose 3.26% to Rs 1657.95, extending Monday's near 5% post-result rally as the management gave a guidance of 20% growth in revenue and 25% growth in new orders in the current financial year at the time of announcing Q4 March 2010 results on Monday, 17 May 2010. But the stock came off the day's high of Rs 1680. The stock was the top gainer from the Sensex pack.
L&T's order inflow jumped 90% to Rs 23843 crore in Q4 March 2010 over Q4 March 2009. The company's order book as at 31 March 2010 stood at Rs 1,00,239 crore, which is 2.7 times its sales of Rs 36,996 crore for the year ended March 2010. Net profit rose 44% to Rs 1438.10 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours on Monday, 17 May 2010.
Among other capital goods stocks, Bharat Heavy Electricals, BEML, Thermax and Punj Lloyd rose by between 0.64% to 4.82%.
IT pivotals rose on bargain hunting after recent losses on hopes their limited exposure to the debt-ridden countries in Europe would not seriously dent their outlook. Europe is the second biggest market for Indian IT firms. India's second largest software services exporter Infosys rose 0.28%, with the stock rebounding from losses in the past three trading sessions.
India's third largest software services exporter Wipro rose 2.21%, with the stock rebounding from a three-day fall. But, India's largest software services exporter TCS fell 0.94% on reports the UK government will review outsourcing contracts, including agreements signed with TCS, in a bid to cut government spending.
India's largest thermal power producer by sales NTPC lost 0.2%, extending Monday's losses as net profit declined 4.52% to Rs 2017.65 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours on Monday, 17 May 2010.
Some pharma stocks fell on profit taking. Ranbaxy Laboratories, Sun Pharmaceutical Industries, Cipla fell by between 0.93% to 1.08%.
Reliance Infrastructure rose 0.31% on bargain hunting. The stock had lost nearly 3% on Monday, 17 May 2010, on weak Q4 result. Net profit fell 27.46% to Rs 251.09 crore in Q4 March 2010 over Q4 March 2009. The company announced the result on Saturday, 15 May 2010.
Consumer durables stocks rose on bargain hunting. Rajesh Exports, Blue Star, Titan Industries and Gitanjali Gems rose by between 0.04% to 2.81%.
Interest rate sensitive banking shares declined on profit taking. India's largest private sector bank by net profit ICICI Bank fell 1.45%, with the stock falling for the third straight day.
India's second largest private sector bank by net profit HDFC Bank fell 1.49% with the stock falling for the fourth straight day.
But, India's biggest commercial bank in terms of branch network State Bank of India (SBI) rose 1.1%, with the stock gaining for the second straight day. SBI expects its advances to grow by 22-23% in the current financial year. SBI's net profit declined 31.93% to Rs 1866.60 crore in Q4 March 2010 over Q4 March 2009. The bank announced the result during market hours on Friday, 14 May 2010.
India's largest mortgage lender by total income Housing Development Finance Corporation fell 0.44% with the stock falling for the third straight day. The company's board on 3 May 2010 approved a 5-for-1 stock-split.
HDFC has reportedly extended concessional home loan scheme till 30 June 2010. Under the scheme, HDFC would offer a fixed interest rate of 8.25% up to March 2011, 9% for the next one year and a floating rate thereafter. The scheme was scheduled to end on 30 April 2010.
Tarapur Transformers clocked the highest volume of 6.35 crore shares on BSE. Cals Refineries (2.76 crore shares), Birla Power Solutions (1.33 crore shares), Bank of Rajasthan (1.1 crore shares) and Reliance Natural Resources (47.34 lakh shares) were the other volume toppers in that order.
Tarapur Transformers clocked the highest turnover of Rs 361.38 crore shares on BSE. Tata Steel (Rs 168.95 crore), State Bank of India (Rs 154.56 crore), Larsen & Toubro (Rs 142.48 crore) and Bank of Rajasthan (Rs 109.98 crore) were the other turnover toppers in that order.
Crude continues to slide down
Prices drop on global recovery worries
Crude oil prices ended substantially lower at Nymex on Monday, 17 May 2010. Prices fell as the dollar rose substantially and traders continued to mull over the pace of euro zone's recovery and its impact on the currencies, especially on the euro. Slower the pace of global recovery, lesser will be the demand for oil.
On Monday, crude-oil futures for light sweet crude for June delivery closed at $70.08/barrel (lower by $1.53 or 2.1%). During intra day trading, prices slipped to a low of $69.27. Last week, crude shed 4.6%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 2.6%.
Prices have shed almost 16% since it hit a high of $86.5 during first week of April this year. Prices are also 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 135% 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 today, the euro dropped once again against the dollar. The dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.
Among economic data for the day, The National Association of Home Builders on Monday reported a gain in confidence among U.S. home builders in May, with the trade group's index hitting a 33-month high. The housing market index rose three points in May to 22 after a four-point increase in April. At 22, the index is at its highest point since August 2007, but it's still very weak in historic context. Before the current downturn, the index had been at 22 or lower just twice in its 25-year history.
Last week, The International Energy Agency lowered by 220,000 barrels a day its forecast for global oil demand for 2010. Oil demand is estimated to grow from 2009 by 1.9%, equating to 1.6 million barrels a day, to 86.4 million barrels a day.
In contrast, the U.S. Energy Information Agency had raised its outlook for global oil demand to 1.6 million barrels per day in 2010, slightly higher than the 1.5 million barrels-a-day projection made last month. Separately, The Organization of the Petroleum Exporting Countries had also said last week it was raising its estimate for global oil demand for 2010. OPEC expects global oil demand to grow by 950,000 barrels a day to 85.38 million barrels a day. It previously expected growth of 900,000 barrels a day.
Among other energy products on Monday, reformulated gasoline for June delivery declined 9 cents, or 4.1%, to settle at $2.0431 per gallon. Natural gas for June delivery added 9 cents, or 2%, to settle $4.3980 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 May delivery closed lower by Rs 46 (1.4%) at Rs 3,218/barrel. Natural gas for May delivery closed at Rs 200.4, higher by Rs 3.5 (1.8%).
Market may remain volatile amid choppy Asian stocks
The market may extend last two days' losses if trading in S&P CNX Nifty index futures on the Singapore stock exchange is of any indication. It indicated that the Nifty could fall 17 points at the opening bell. High volatility cannot be ruled out amid choppy Asian markets. Major Asian markets were higher Tuesday in volatile trade after US markets managed a late-session rebound when the dollar pulled back from a four-year high against the euro. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore and Taiwan rose by between 0.07% to 0.45%. But, the key benchmark indices in China and South Korea fell by between 0.25% to 0.34%.
Asia's strong growth outlook and prospects for better returns will lift capital inflows into the region but that could increase appreciation pressure on currencies which may require authorities to impose capital controls, a report from Asian Development Bank said.
RBI governor D Subbarao on 11 May 2010 said India prefers long-term capital inflows to short-term flows and non-debt flows to debt flows. There is no proposal to impose a Tobin type tax to rein in excessive capital inflows, the RBI governor said. However, it needs reiterating that no policy instrument is clearly off the table and the choice of instruments will be determined by the context, Subbarao added.
But, worries over fiscal problems in southern Europe triggered outflow from China and India funds during the week ended 12 May 2010. As a result, Asia funds, excluding Japan, saw only $27 million inflows, their worst week in well over a year, as per data from global fund tracker EPFR Global.
US stocks staged a comeback in late trading on Monday as bargain hunters snapped up beaten-down shares, setting aside concerns that efforts to tackle the euro-zone debt crisis could stifle the global economy. The Dow Jones Industrial Average edged up 5.67 points, or 0.05% to end at 10,625.83. The Standard & Poor's 500 Index added 1.26 points, or 0.11% to 1,136.94. The Nasdaq Composite Index rose 7.38 points, or 0.31% to close at 2,354.23.
Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 2,040 companies rose 24.7% to Rs 54,430 crore on 25.4% rise in sales to Rs 5,45,282 crore in the quarter ended March 2010 over the quarter ended March 2009.
Chennai Petroleum Corporation, Bombay Rayon, ICRA, JK Lakshmi Cement, Bilpower among others will announce their January-March 2010 quarter results today.
On the macro front, while the headline inflation declined to 9.59% in April 2010 from 9.9% rise in March 2010, the data for February 2010 was revised upwards to 10.06% from provisional figure of 9.89%, the latest government data showed. The RBI has forecast the headline inflation to ease to 5.5% at end-March 2011 on expectations of a normal monsoon.
The latest economic data showed industrial output rose lower than expected 13.5% in March 2010. The growth was also slower than February's 15.1% expansion. Manufacturing sector output rose 14.3% in March 2010. Industrial output rose 10.4% in the 2009/10 fiscal year, faster than the 2.6% growth clocked in the previous fiscal year.
India Meteorological Department (IMD) said on Monday, 17 May 2010, that conditions are favourable for further advance of monsoon over more parts of Bay of Bengal and remaining parts of Andaman during next 48 hours. The southwest monsoon has set over the Andaman and Nicobar islands and some parts of southeast Bay of Bengal.
The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
The Reserve Bank of India (RBI) expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.
Rally in index heavyweight L&T aided an intraday rebound on the domestic bourses on Monday, 17 May 2010, triggered by recovery in European stocks and US index futures. Intraday volatility was high. The BSE 30-share Sensex ended the day with a loss of 159.04 points or 0.94% to 16,835.56 on Monday.
As per provisional figures on NSE, foreign funds sold shares worth Rs 1224.29 crore and domestic funds bought shares worth Rs 381.89 crore on Monday.
Daily Grey Market Premiums - May 18 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Tarapur Transformers | 75 | 3 to 5 |
| Mandhana Industries Ltd. | 130 | 5 to 7 |
| Sutlaj Jal Vidhut Nigam (SJVNL) | 26 | 3 to 4 |
| Jaypee Infra | 102 | Discount |
Markets likely to get a flat to positive start
Headlines for the day:
DoT may reject Trai's 2G pricing recommendation
ABB plans Rs4,400 cr buyback offer to raise stake to 75%
Tata Power softens stand on power battle
Events for the day:
Major corporate action
Tarapur Transformers to be list today
Ex-date for bonus issue of SE Investments in the ratio of 3:1
Results: Chennai Petroleum
For more events, log on to Sharekhan.com
Pre-market report
Global signals
The European shares ended lower on Monday, with miners weak as metals prices fell on a strengthening dollar, while gains in defensive food producers and drug makers limited wider losses.
The US stocks staged a comeback in late trading on Monday as bargain hunters snapped up beaten-down shares, setting aside concerns that efforts to tackle the euro-zone debt crisis could stifle the global economy.
In today's trade, the Asian markets were trading on a mixed note, with bargain hunters inspired by the mild gains on Wall Street. At the time of writing this report, SGX Nifty was trading 17 points lower.
Indian markets
There is still a fair degree of concern as equities are still struggling to sustain their early gains, The Wall Street still looks pretty ordinary as the euro remains dull. All it will take is some worrisome comment out of Europe and the concern will flood back into the market. The Asian markets were mixed in early trading, after the Wall Street finished slightly higher in an erratic session. The Domestic markets are expected to have a flat to positive start owing to the mixed signals that are coming from the global markets.
Monsoon rains, vital to farmers and economic growth, arrived Monday ahead of schedule in the far-flung Andaman and Nicobar Islands in the Bay of Bengal, after the country suffered its worst drought in decades last year. As the monsoon is on time it will be a key variable over the next few weeks and even months, which will give the direction to the markets.
The earning of Chennai Petroleum is later to be announced today - the stocks will be closely eyed by the investors.
Commodity cues
In the commodity space, the crude oil prices slipped to a 5-month low Monday, with the Nymex light crude oil for the June series down by $1.53 per barrel, whereas in the metals space, the Comex Gold for the June series rose by $0.30 and the Comex Silver for the June series was declined by $0.37 to a troy ounce respectively.
Daily trend of FII/MF investment in equities
On May 17, 2010, the foreign Institutional Investors (FIIs) were the net sellers of the Indian stocks to the tune of Rs204.90 crore, whereas the domestic mutual funds, on May 14, 2010, were the net sellers of the stocks to the tune of Rs205.50 crore.
Subdued start, improvement later!
There is not any memory with less satisfaction than the memory of some temptation we resisted - JB Cabell.
The recovery may sure tempt you to believe things are settling down but the situation remains uncertain and risk aversion is still pretty elevated. We managed to bounce back after another rough start as European markets were relatively stable. US stocks too rebounded from session lows to end in the green. Asian markets are mixed this morning with Chinese market in the red yet again. Given the murky global outlook, we expect a subdued start to the proceedings. Sentiment may improve a little, provided there no further tremors on the external front. But, on the whole we expect a volatile yet rangebound session.
Technically, the levels to watch are 4950 on the downside and 5100-5200 on the way up. A close below 4900 could lead to some panic. A decisive breakout may continue to elude us till the Nifty sustains above 5300. For the time being, the broader market may hold more promise as the large caps appear to be fully priced. In terms of events, the latest GDP data will be out on May 31. Monsoon’s progress will also have some bearing on market mood in the near term.
We are certainly not out of the woods yet as far as global factors are concerned, and so it would be wise to remain cautious. Fresh buying could be avoided for now. Long-term bulls can wait for some more correction (about 5% from here) before taking the plunge.
Results Today: Bilpower, Bombay Rayon, Chennai Petro, Grindwell Norton, ICRA, JK Lakshmi Cement, Man Industries, Motherson Sumi, Munjal Showa and Omnitech Info.
FIIs were net sellers of Rs12.24bn in the cash segment on Monday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs3.82bn. In the F&O segment, the foreign funds were net sellers of Rs9.83bn. FIIs were net sellers of Rs2.05bn in the cash segment on Friday, as per the SEBI data. Mutual Funds were net sellers of Rs2.05bn in the cash segment on the same day.
US stocks ended slightly higher on Monday, as a late-session reversal in technology companies and private-school operators offset lingering worries about Europe's debt crisis. All the three main US indices erased big losses after the euro rebounded from a four-year low and gained ground against the dollar.
The Dow Jones Industrial Average was up 5.67 points, or 0.1%, at 10,625.83, snapping a two-day losing streak. Out of 30 components, 15 ended higher.
For every stock on the rise, 1.5 fell on the New York Stock Exchange, where more than 1.4 billion shares traded hands. Composite volume topped 6.1 billion.
The blue-chip Dow average had spent nearly 90% of the day lower and had fallen as much as 184 points.
Consumer staples and telecom sectors also led gainers on the S&P 500 Index, which closed up 1.3 points, or 0.1%, to 1,136.94. Energy was the hardest-hit sector on the S&P 500, falling nearly 1%.
But it was a turn higher in consumer-discretionary shares, including a late-session rally in educational providers Apollo Group and DeVry, that helped turn the broader market around.
The technology sector also closed up higher with the Nasdaq Composite rising 7 points, or 0.3%, to 2,354.23.
Before posting gains, all three indexes were more than 1% lower but began to trim losses with an hour left in the session.
Earlier, the euro sank below $1.23, as euro-zone debt concerns weighed on investors. But the currency recovered its losses late in the afternoon. The euro stabilized near $1.24. It had declined as low as $1.2233 as the market considered the impact of budget cuts in countries on Europe's economic recovery.
US stocks had tumbled on Friday, as the Dow lost 1.5%, and S&P 500 and Nasdaq slipped about 2% on a weak euro.
After holding firm against the euro most of the day, the dollar fell 0.3% late in the afternoon. But the greenback was 0.3% higher against the British pound and rose 0.1% versus the Japanese yen.
US light crude oil for June delivery slid $1.53, or 2.1% to settle at $70.08 a barrel - a five-month high.
Gold prices continued to rise, gaining 70 cents, or 0.1%, to settle at $1,228.50 per ounce.
Treasury prices gave up gains Monday afternoon. The price of benchmark 10-year note edged lower, and its yield edged up to 3.49%.
A report from the Federal Reserve Bank of New York showed that manufacturing growth slowed in the region in May. The Empire State Manufacturing Survey's index fell to 19.1 from 31.9 in April. Economists expected the index to slip modestly to 30.
The National Association of Home Builders on Monday reported a gain in confidence among U.S. home builders in May, with the trade group's index hitting a 33-month high.
The Treasury said China boosted its holdings of US debt in March for the first time in six months, increasing them by 2% to $895.2 billion. With mounting concerns over European debt and a strengthening US economy, overall foreign holdings of Treasury securities rose by 3.5% to $3.88 trillion.
General Motors (GM) posted its first quarterly profit in nearly three years, earning $865 million on revenue of $31.5 billion. After emerging from bankruptcy last July, the company has trimmed costs and increased sales thanks to an improving economy and recall troubles at rival Toyota.
Hope improvement retailer Lowe's posted a profit that rose 2.7% from a year earlier and topped expectations as demand for big-ticket items improved. But the company's forecast for the second quarter came in lower than expectations, and shares of the retailer finished 3% lower.
European shares ended a choppy session down, dragged lower as a drop in commodity prices weighed on the mining sector and concerns about the future of the region's economy sent the euro to a four-year low versus the dollar.
After a 4.8% rise last week, the Stoxx Europe 600 index declined 0.1% to close at 248.09.
Oil producers had helped buoy European shares in earlier activity. BP shares temporarily rose after it provided investors with some hope that it's starting to control an oil spill in the Gulf of Mexico. BP said over the weekend that it was able to reroute some oil. But oil shares turned south as oil futures slumped.
The UK's FTSE 100 index ended virtually flat at 5,262.54. The German DAX index rose 0.2% to close at 6,066.92, while the French CAC-40 index fell 0.5% to settle at 3,543.55.
The Greek ASE Composite Index declined 1.4% to 1,634.61.
The euro traded at a four-year low against the dollar. It later trimmed losses to change hands at $1.2310, a loss of 0.4% from Friday.
Shares of life insurer Prudential was down 1.5% to 534.5 pence. The firm launched its delayed share sale to finance the acquisition of AIG's Asian business, AIA. Prudential said shareholders will be able to buy 11 new shares for every two they already own at a price of 104 pence a share.
The rights issue had been delayed while the company sought approval from the U.K. Financial Services Authority for the capital raising. Prudential is paying $35.5 billion for AIA, including $25 billion in cash.
Shares of hedge-fund manager Man Group dropped 8.8% after it said it has agreed to buy GLG Partners for $1.6 billion. The deal will create a firm with around $63 billion of funds under management.Daily News Roundup - May 18 2010
ABB has made an offer to increase stake in its Indian subsidiary by 22.89% at a cost of nearly US$1bn. ABB said it will buy 48.59mn shares at Rs900 per share, a 34% premium to last Friday’s closing price of ABB India shares. (ET)
Credit rating agency Fitch removed Bharti Airtel from its negative watch list in anticipation of an US$2bn equity infusion during the current fiscal, as well as hopes of better overall performance. (ET)
DLF confirmed it had decided to sell its stake in Aman Resorts, but a sale would exclude Aman’s New Delhi property. (ET)
Tata Steel is keen on forming a JV with Steel Authority of India (SAIL) to set up a steel plant. (ET)
Thermax has signed a five-year technology transfer agreement with Germany based Lambion Energy Solutions in the areas of energy generation from waste. (ET)
Zain Group received preliminary approval to transfer its licences in Uganda to Bharti Airtel. (ET)
Shree Renuka Sugars is renegotiating the price of its proposed Rs15.3bn acquisition of Brazilian sugar and ethanol maker Equipav amidst differences over the amount of debt on the company’s books. (ET)
Tata Motors-owned Jaguar Land Rover (JLR) is set to wrap up the £600mn (US$850mn) three-year Chinese deal it had bagged in February 2009, one year ahead of schedule. (BS)
Input costs prompt 12% increase in Hindalco’s capex in six months. (BS)
Essar Energy plc said its indirect subsidiary, Essar Power Gujarat Ltd (EPGL), has signed a power purchase agreement (PPA) with Gujarat Urja Vikas Nigam Ltd (GUVNL). (FE)
Shriram Transport Finance Company plans to infuse around Rs6bn capital in its proposed subsidiary, for conducting equipment finance business, which is expected to float in a month. (BS)
Maruti Suzuki India has appointed Japanese firm Nippo as its consultant for developing a test track at Rohtak, in Haryana, where its research and development centre is being set up at an investment of Rs15bn. (FE)
Lupin has lost the battle on antibiotic Levofloxacin against US-based Ortho Mcneil Pharma and Japanese drug maker Daiichi Sankyo with the US Court of Appeals for Federal Circuit upholding the patent term extension granted to the innovator company on the drug. (FE)
Alstom Projects said it has bagged Rs1.2bn contract to supply electro mechanical equipment to the 96 mw Jorethang loop hydroelectric project in Sikkim. (FE)
Bank of India on Monday slashed interest rates on deposits by 25-75 basis points in short-term category. (FE)
KSK Energy Ventures has commenced operations at the first of its four 135MW units that constitute the 540MW Wardha Warora coal-fired project in Maharashtra. (BS)
Godrej Properties promoters are open to their stake in their real-estate company to fuel future growth. (BL)
Essar Energy plc through its indirect subsidiary, Essar Power Gujarat Ltd (EPGL), has signed a PPA with Gujarat Urja Vikas Nigam Ltd (GUVNL) for 800MW of contracted capacity from the 1,320MW coal-fired Salaya II power project to be located in Jamnagar district. (BL)
Prudential may sell Tata AIG stake to Tatas. (BS)
The government’s provisional revenue from the sale of 3G airwaves Monday crossed the Rs650bn mark and nationwide license price reached over Rs160bn at the end of 176 rounds of an auction. (ET)
DoT is likely to reject the telecom regulator's proposal to charge operators holding excess spectrum at a rate determined on the basis of the ongoing 3G bids. (BS)
The Centre plans to do both an audit as well as security checks of all China-made telecom gear installed on the existing networks of all service providers before allowing any fresh imports from that country. (ET)
The Planning Commission of India to closely monitor the progress in infrastructure development in the country. The commission, which has till date set annual projections over a five-year period, has set infrastructure targets for various sectors on a quarterly basis and will gauge the performance of ministries responsible for infrastructure development. (BS)
India looks all set to open its doors further to FDI in the sensitive defence production. The commerce and industry ministry has put out a discussion paper that suggests an increase in FDI in defence to 74% from 26% to encourage greater local manufacturing and technology transfer. (ET)
India has settled a dispute over taxing profits of captive IT services units and research arms of US firms, bolstering New Delhi’s position as a preferred destination of such investments. (ET)
Indian corporate borrowed US$4.3bn overseas in March 2010, taking the overall external commercial borrowing for the fiscal 2009-10 to US$17.6bn. (ET)
India and Japan are going to re-open discussions on liberalisation of movement of professionals, an issue that has long stalled any significant progress in the conclusion of the free trade agreement (FTA) between the two countries. (FE)
Sensex recovers...Nifty ends above 5000
It could have been worse. That's what everyone connected to the Indian bourses would be saying after the key stock indices staged a smart recovery from the day's lows. What's more, the NSE Nifty managed to end above 5000, a crucial psychological and technical level. The broader market did even better than the frontline indices.
The rebound in the Indian market came post noon when the European markets opened for trading. Stocks in the region, which is at the heart of a raging debt crisis, managed to hold their own after a volatile opening. Steady European markets also led to a recovery in the US stock futures.
The BSE Sensex closed another tumultuous day at 16,835.56, down 159.04 points or 0.94% from the previous close. Earlier, it touched a day's low of 16,551.00 after opening at 16,961.92. The NSE Nifty, on the other hand ended at 5,059.90, down 33.60 points or 0.66%. It hit an intra-day low of 4966.25 after starting the day at 5093.90.
The BSE Small-Cap and Mid-Cap indices were down 0.7% and 0.2%, respectively at 8,750 and 6,927.
In terms of sectors, Oil & Gas, IT, Auto, Real Estate and Banking indices on the BSE were the biggest losers, down 0.5-2%. Capital Goods sector was the star of the day, buoyed by parent's open offer for ABB India and L&T's strong results.
BSE Pharma and BSE FMCG indices too ended in the green while BSE Metal index managed to recoup from the worst point of the day. Power was a steady performer.
Within the Sensex, the top losers were DLF (~4%), ACC (3.3%), Wipro (3.3%), Tata Motors (3.3%), Jaiprakash Associates (3%), Reliance Infra (2.9%), Reliance Industries (2.6%), TCS (2.5%), Tata Steel (2.25%) and Reliance Communications (2%).
L&T (5%), Hindustan Unilever (2.5%) and SBI (1.3%) were the notable gainers.
Outside the main indices, the main losers included Lakshmi Overseas, Prakash Industries, DCM Shriram, Jyoti Structures, Engineers India, Aban Offshore, KPIT Cummins, Punj Lloyd, Astra Micro, Jubilant Foodworks, Kingfisher Airlines, Bhushan Steel, IVRCL Infra, Chennai Petro, Ruchi Infra and McNally Bharat.
Shares of L&T climbed after the company said that its net profit in the fourth quarter stood at Rs14.38bn versus Rs9.98bn in the same quarter last year. Net sales for the reporting quarter came in at Rs133.75bn compared to Rs104.69bn in the year-ago period.
The current order book of L&T stands at Rs1 lakh crores. Large order book provides sufficient visibility, L&T said, adding that it is cautiously optimistic about the future prospects.
Among the other companies that announced their results, NTPC ended down about 1% while Gail India shares rose by over 1%. Mundra Port closed down by nearly 2% post its results and stock split announcements.
Shares of ABB India surged by 23.4% after its Swedish parent made a voluntary open offer to increase its shareholding in the Indian arm to 75%. The stock closed at Rs831 after being as high as Rs869. It opened at Rs700.
ABB Asea Brown Boveri Ltd. and ABB Ltd. are proposing to acquire up to 48,510,997 fully paid up equity shares of the Target Company, constituting 22.89% of the Voting Share Capital at a price of Rs900 per equity share. The offer will open on July 8 and will close on July 27.
Shares of Whirlpool India jumped 20% after the company said its net profit in Q4 FY10 soared 234% to Rs577.2mn on a 56% increase in net sales to Rs5.56bn. The stock closed at Rs239.55. This is also its all time high. The stock had hit a 52-week low of Rs36 on May 14, 2009.
Other notable gainers today included the likes of Piramal Healthcare, Dena Bank, Gateway Distriparks, Everest Kanto, Karnataka Bank, Siemens, Bartronics, Zydus Wellness, Bayer Crop, Balrampur Chini and Federal Bank.
Precious metals fluctuate
Prices remain volatile on doubts of global recovery
Precious metals ended lower on Monday, 17 May at Comex. Gold prices registered marginal drop while silver registered substantial drop. Prices remained volatile for the entire day. Strong dollar also took some shine away from precious metals.
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 Monday, gold for June delivery ended at $1,228.1 an ounce, lower by $0.30 (0.02%) an ounce on the New York Mercantile Exchange. A sliding U.S. stock market and further losses for oil took a toll on gold as investors sold bullion to cover margin calls in stocks and other commodities. Gold for June delivery had settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February.
Last week, gold ended higher by 1.5%. For the month of April, gold ended higher by 6%. 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 11.6%.
On Monday, July Comex silver futures ended lower by 37 cents (1.9%) at $18.85 an ounce. Last week, silver ended higher by 4.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.7%.
In the currency market today, the euro dropped once again against the dollar. The dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.
Among economic data for the day, The National Association of Home Builders on Monday reported a gain in confidence among U.S. home builders in May, with the trade group's index hitting a 33-month high. The housing market index rose three points in May to 22 after a four-point increase in April. At 22, the index is at its highest point since August 2007, but it's still very weak in historic context. Before the current downturn, the index had been at 22 or lower just twice in its 25-year history.
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 higher by Rs 96 (0.52%) at Rs 18,260 per ten grams. Prices rose to a high of Rs 18,424 per 10 grams and fell to a low of Rs 18,151 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 265 (0.9%) lower at Rs 29,393/Kg. Prices opened at Rs 29,750/kg and fell to a low of Rs 29,192/Kg during the day's trading.
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