India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Wednesday, June 02, 2010
Nifty June 2010 futures above 5,000
Turnover declines
Nifty June 2010 futures were at 5,014, at a discount of 5.85 points compared to spot closing of 5019.85. Turnover in NSE's futures & options (F&O) segment was Rs 73,509.99 crore, lower than Rs 81,961.32 crore on Tuesday, 1 June 2010.
JSW Steel June 2010 futures were at discount at 1050 compared to the spot closing of 1054.05.
Tata Motors June 2010 futures were at premium at 750.40 compared to the spot closing of 749.25.
Tata Steel June 2010 futures were at premium at 484.85 compared to the spot closing of 483.50.
In the cash market, the S&P CNX Nifty rose 49.65 points or 1% at 5,019.85.
Asian stocks mostly bearish
Apart from India and China, most of the markets maintain their weak run
Asian markets mostly ended lower on a combination of strong dollar and continued worries on the global macroeconomic scenario. The US currency had hit a fresh four-year high against the Euro yesterday and though the currency eased somewhat in the intraday moves, the sentiments were uncertain, keeping the late recovery under check for the Asian stocks. The DOW futures were all over the place, rising at one point and falling at another. Selling pressure on commodities also kept the overall movement lackluster, hurting the resource stocks. Financials were particularly under stress today after the European Central Bank said on Monday that banks in the bloc could suffer 195 billion euros of write-downs by the end of 2011 in a second wave of losses from the global financial crisis. India and China managed to show some resilience while the other markets were marred in bearish activity.
The Australian stocks stumbled right from start. Weak cues from Wall Street and selling pressure in commodities failed to lift the sentiments while a softness moderation in the economic growth also kept advances limited. The benchmark S&P/ASX200 Index declined 32.10 points, or 0.73% and closed at 4,381, while the All-Ordinaries Index ended at 4,404, representing a loss of 33.00 points, or 0.74%.
On the economic front, a report released by the Australian Bureau of Statistics revealed that the economy grew at a considerably slower pace between January and March compared to the final three months of 2009, with private sector spending on machinery and equipment and construction acting as a major drag on growth. As per the report, the nation's GDP grew 0.5% from October to December period of last year. This was exactly in line with analyst forecasts, and follows a revised 1.1% expansion in the final three months of 2009. Economic growth for the December quarter was revised up from 0.9%. The report further noted that, on a year-over-year basis, the Australian economy grew 2.7% in the March quarter.
The Japanese stock market extended losses for the second consecutive, giving up early gains as traders preferred to lock in profits. The markets had bounced earlier after the Prime Minister Hatayoma offered to quit his post. The benchmark Nikkei 225 Index gace up108.59 points, or 1.1%, to 9603, while the broader Topix index of all First Section issues closed down 9.99 points, or 1.1%, to 870.
On the economic front, a statement released by the Bank of Japan revealed that the monetary base in the country jumped 3.7% on year in May, coming in at 98.432 trillion yen. That was sharply higher than analyst expectations for a 2.8% annual increase following the 2.9% gain in April. Banknotes in circulation were up 0.6% on year, although coins in circulation eased an annual 0.4%. Current account balances surged 22.9% on year, including an 18.6% annual spike in reserve balances.
In China, stocks were seen edging up slightly after a volatile session. Markets bounced back from early lows but gave up bulk of the intraday gains, on worries about Chinese banks' fundraising plans. Bank of China, which is raising 40 billion Yuan ($5.9 billion) by selling convertible bonds in Shanghai, said yesterday that it may consider new fundraising plans. The benchmark Shanghai Composite added 3 points to close up 0.12% on the day.
In Mumbai, stocks bounced back as a conclusive break above 5000-point mark on the NIFTY provided plenty of buying support for the blue chips. At the close, the benchmark 30-share index, BSE Sensex added 169.81 points or 1.02% at 16,741.84. Meanwhile, the broad based NSE Nifty went up by 49.65 or 1% at 5,019.85. Good gains were noted in the information technology, Auto and Realty stocks.
In overnight trades, US stocks closed sharply lower after a choppy trading session, with news of possible criminal charges against BP Plc largely responsible for a late-session sell-off. Concerns about European financial stability and China's diminished pace of manufacturing activity also weighed on the markets, while upbeat economic data out of the U.S. once again failed to prop up equities. The major averages closed near their worst levels of the day. The Dow dropped 112.61 points or 1.1 percent to 10,024.02, the Nasdaq declined by 34.71 points or 1.5 percent to 2,222.33 and the S&P 500 slid by 18.70 points or 1.7 percent to 1,070.71.
In other markets, Hang Seng in Hong Kong dropped 0.13% while Straits Times of Singapore added 0.45%. TSEC in Taiwan eased considerably though, shedding1.28% on the day.
In commodities, crude oil extended losses to trade under $72 per barrel as markets awaited the US weekly inventories report. In currencies, dollar stayed steady hugging to levels just above 1.2200. The euro hit a four-year low of $1.2110 on Tuesday after the ECB's warning of a new wave of bank losses.
BSE Bulk Deals to Watch - June 2 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
2/6/2010 530901 ACIL Cot Inds RAJENDRA N SURANA S 75775 34.25
2/6/2010 530901 ACIL Cot Inds AAYUSH RAJENDRA SURANA S 79502 33.35
2/6/2010 513309 Alumeco India ROSHANI NEETISH DOSHI B 200000 13.15
2/6/2010 513309 Alumeco India CREDO CAPITAL PIC A/C KII LTD. S 200000 13.15
2/6/2010 531761 Amulya Leas SECUROCROP SECURITIES INDIA PRIVATE LIMTED B 126500 38.00
2/6/2010 531761 Amulya Leas KULWANTRAI JAIN B 50500 38.00
2/6/2010 531761 Amulya Leas SURENDRAKUMAR JAIN S 70000 38.01
2/6/2010 531761 Amulya Leas MADHUR JAIN S 110300 38.00
2/6/2010 531761 Amulya Leas SAVITRI SUNEJA S 70000 36.55
2/6/2010 531591 Bampsl Sec SUNDERDASS AGARWAL B 514900 1.39
2/6/2010 531591 Bampsl Sec KAUSHALYA GARG S 602000 1.40
2/6/2010 532816 Broadcast Init ROSHANI NEETISH DOSHI B 150000 17.55
2/6/2010 532816 Broadcast Init CREDO CAPITAL PIC A/C KII LTD. S 150000 17.55
2/6/2010 531932 CG Impex DEE CUBES DIAMONDS PRIVATE LIMITED B 48000 4.16
2/6/2010 531932 CG Impex DEE CUBES DIAMONDS PRIVATE LIMITED S 48000 4.16
2/6/2010 530495 Chhattisgarh Inds PRISM IMPEX PRIVATE LIMITED B 472478 7.15
2/6/2010 530495 Chhattisgarh Inds SUMAN GUPTA B 40002 7.15
2/6/2010 530495 Chhattisgarh Inds MANOJ KUMAR GANGULY S 509400 7.15
2/6/2010 532456 Compuage Info RUPA PRADIP SHAH B 98853 157.44
2/6/2010 532456 Compuage Info RUPA PRADIP SHAH S 98825 157.51
2/6/2010 531270 Dazzel Conf REKHA BHANDARI B 42692 21.80
2/6/2010 531270 Dazzel Conf SANJAY SINGH THAKUR B 44699 22.91
2/6/2010 532772 Dev Credit Bank TRANSGLOBAL SECURITIES LTD. B 1048515 48.56
2/6/2010 532772 Dev Credit Bank TRANSGLOBAL SECURITIES LTD. S 1056048 48.69
2/6/2010 531601 Gujarat Capital MITTAL SECURITIES FINANCE LIMITED B 50511 55.90
2/6/2010 511682 IFL Promoters DMC INTERNATIONAL LIMITED B 28458 15.00
2/6/2010 511682 IFL Promoters DMC INTERNATIONAL LTD S 23700 15.00
2/6/2010 514312 Jaihind Syn VIRSEN MARUTI DHOTRE B 25000 11.30
2/6/2010 514312 Jaihind Syn RAJESH DINESH SHAH B 25000 11.30
2/6/2010 514312 Jaihind Syn REKHA KUNTAL NARCHENIA S 25724 11.30
2/6/2010 514312 Jaihind Syn JMP SECURITIES PVT LTD S 38843 11.30
2/6/2010 514312 Jaihind Syn VANDANA VIMAL MEHTA S 34285 11.30
2/6/2010 530255 KAY Power KAUSHALYA GARG B 75900 14.92
2/6/2010 532967 Kiri Dyes LIFE INS CORPORATION OF INDIA B 100000 590.00
2/6/2010 532967 Kiri Dyes MANISHKUMAR PRAVINCHANDRA KIRI S 100000 590.30
2/6/2010 511760 Kosian Inds VISHESH JAIN S 22000 7.61
2/6/2010 506919 Makers Lab KISHAN GOPAL MOHTA B 24207 47.60
2/6/2010 506919 Makers Lab GINNI FINANCEPVT LTD S 24207 47.60
2/6/2010 590111 MASTER GOVARDHAN LAL B 28876 33.09
2/6/2010 590111 MASTER GOPALAKRISHNA BONAM B 51050 33.28
2/6/2010 590111 MASTER SATYANARAYANA VARAPRASAD GARIKIPATY S 27990 32.79
2/6/2010 523792 Mazda SHREEPATI HOLDINGS & FINANCE PVT. LTD B 22159 123.32
2/6/2010 590060 MK Exim DATTA CHANDRAVADAN PARIKH B 22000 57.66
2/6/2010 590060 MK Exim LALIT J KACHHADIA B 30735 57.01
2/6/2010 590060 MK Exim DEVEND RARAMESHBHAI SAGAR S 20000 57.80
2/6/2010 531453 Mohit Inds PRAKASHKUMAR NEMCHAND SHAH B 23951 35.58
2/6/2010 531453 Mohit Inds NARESHCHAND JAIN B 25051 35.83
2/6/2010 531453 Mohit Inds NARESHCHAND JAIN S 25051 35.49
2/6/2010 531453 Mohit Inds GITABHAI NIRANJAN S 25000 35.85
2/6/2010 531496 Omkar Overseas SANTOSH ABHAYRAJ SHUKLA B 25000 83.05
2/6/2010 531496 Omkar Overseas SHALLY PRAVINKUMAR JAIN S 35000 83.05
2/6/2010 512097 Oregon Comm AMULG DESAI B 10450 334.52
2/6/2010 513558 Real Strips KISHAN MOHTA B 34774 58.89
2/6/2010 513558 Real Strips KISHAN GOPAL MOHTA B 33484 54.55
2/6/2010 513558 Real Strips GINNI FINANCE PRIVATE LIMITED S 26000 53.73
2/6/2010 513558 Real Strips KISHAN GOPAL MOHTA S 33484 58.90
2/6/2010 505368 Revathi Equip AXIS STEELS LIMITED B 20199 600.00
2/6/2010 505368 Revathi Equip HITESH SATISHCHANDRA DOSHI S 20569 600.06
2/6/2010 526753 Roselabs Inds SIDHANT FINANCIAL SERVICES PVT LTD B 80000 70.49
2/6/2010 512359 Rotam Comm RASIKLAL BHAGWANJI PANDYA B 6400 92.92
2/6/2010 531869 Sacheta Metals BHANDARI HEMANT AMOLAKCHAND B 65500 38.46
2/6/2010 531869 Sacheta Metals JETAL KUNAL SHAH S 50200 38.50
2/6/2010 533056 SARK SYS THE IL&FS FINANCIAL SERVICES LIMITED S 86109 40.60
2/6/2010 530075 Selan Expl SMART EQUITY BROKERS PRIVATE LIMITED B 81423 404.71
2/6/2010 530075 Selan Expl OPG SECURITIES P LTD B 100078 402.97
2/6/2010 530075 Selan Expl SMART EQUITY BROKERS PRIVATE LIMITED S 81423 404.97
2/6/2010 530075 Selan Expl OPG SECURITIES P LTD S 100078 403.25
2/6/2010 526133 Supertex Inds DHAVAL AMRISH SHAH B 806805 2.87
2/6/2010 526133 Supertex Inds SHEETAL DHAVAL SHAH B 650000 2.86
2/6/2010 526133 Supertex Inds SUPER INFINCON PVT LTD S 1200000 2.86
2/6/2010 500420 Torrent Pharma GMO EMERGING MARKETS FUND B 780900 566.00
2/6/2010 500420 Torrent Pharma GPC MAURITIUS II LLC S 3920993 566.00
2/6/2010 531874 Venus Ventures SIREESHA MANDAVA B 26000 10.76
2/6/2010 531874 Venus Ventures SRINIVASA RAOMANDAVA S 26000 10.76
* B - Buy, S - Sell
NSE Bulk Deals to Watch - June 2 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
02-JUN-2010,DCB,Development Credit Bank L,TRANSGLOBAL SECURITIES LTD.,BUY,1255791,48.69,-
02-JUN-2010,FCH,Future Capital Holdings L,MONEY MATTERS SECURITIES PVT. LTD.,BUY,2087339,159.00,-
02-JUN-2010,FCSSOFT,FCS Software Solutions Li,SONAL SHARES INVESTMENT & COMPANY (PROP- MEET SUMANBHAI PAT,BUY,4932925,4.00,-
02-JUN-2010,KIRIDYES,Kiri Dyes and Chemicals L,LIFE INSURANCE CORPORA OF INDI,BUY,100000,590.00,-
02-JUN-2010,DCB,Development Credit Bank L,TRANSGLOBAL SECURITIES LTD.,SELL,1255791,48.60,-
02-JUN-2010,FCH,Future Capital Holdings L,AMIF I LTD,SELL,2093912,159.00,-
02-JUN-2010,FCSSOFT,FCS Software Solutions Li,SONAL SHARES INVESTMENT & COMPANY (PROP- MEET SUMANBHAI PAT,SELL,4932925,3.84,-
02-JUN-2010,KIRIDYES,Kiri Dyes and Chemicals L,MANISHKUMAR PRAVINCHANDRA KIRI,SELL,100000,590.00,-
Last lap surge; Nifty above 5000
Today's major news
Reliance Communications rings as Etisalat eyes stake; the stock surges 11.02%
Hero Honda raises prices by up to Rs1,000; the stock up 3.28%
India's manufacturing PMI hits 27-month high
Click here for more stories
Post-market summary
Global signals
The European shares fell on Wednesday, with British Petroleum down after the US launched a criminal probe into the Gulf of Mexico disaster and banks slipping on worries over the recovery from the Euro zone crisis.
The Asian indices closed mixed. SGX Nifty closed 60.5 points higher.
The US stock index futures rose on Wednesday, recovering from a sell-off in the previous session as investors awaited monthly data on pending home and auto sales.
Indian indices
The domestic market, ignoring all the negative cues around the globe, recouped yesterday’s heavy losses. The market witnessed high volatility throughout the day. The Nifty struggled for direction and was stuck in a narrow trading band of 4980-5000. However, the Nifty managed to close above the 5000 mark.
Telecom was buzz on the street today on merger and acquisitions news. The Sensex heavy-weight Reliance Communications surged 11% on the news that UAE's Etisalat Emirates Telecommunications Corp (Etisalat) is in talks to buy 25% stake in the company. The auto stocks too rallied smartly after announcing good sales numbers for the month of May. Today, the Indian indices extracted positive cues back home, which boosted the market sentiments to end the session a strong note.
The key benchmark index, Sensex, opened flat with a positive bias, mere two points higher at 16574.79 and extended its gains as the session progressed. The market sentiments were constructive due to buying interest seen in the telecom and auto shares. However, weakness in Asian and European markets opening negative, pulled the index to touch the day’s low of 16571. However, in the last hour of trade, the Sensex regained strength and surged 203 points to touch the day’s high of 16,774. At closing bell, the Sensex quoted at 16742, 170 points higher. The Nifty closed above 5000 levels, at 5020, up by 50 points.
Market sentiment
The market breadth was strong. Of 2,889 stocks traded on the BSE, 1,663 stocks (57.56%) advanced, whereas 1,097 (37.97%) stocks declined. Hundred and twenty-nine stocks remained unchanged.
Sectoral & stock screening
All the sectoral indices closed higher for the day. BSE TECk gained 1.95% on news that UAE-based company Etisalat is indeed in talks with several Indian telecom operators to buy a stake, followed by BSE Auto that surged by 1.74% after unveiling robust sales figures for May 2010. BSE Metal, which rallied in the previous session, is the second last gainer in the sectoral list, with a gain of 0.46%.
The top-3 gainers were — Reliance Communications surged by 11.02%, Idea Cellular that rose by 8.97% and Religare Enterprises that was up by 8.55%.
The top-3 losers were — REI Agro that slid by 5.22%, Cadila Health that was down by 3.08% and Punj Lloyd that declined by 2.69%.
Viewing volumes
India’s second largest telecom operator — Reliance Communications was the most traded share with over 1 crore shares changing hands on the BSE, followed by natural resources company — Reliance Natural Resources (0.71 crore shares), wind power major — Suzlon Energy (0.70 crore shares), industrial finance company — IFCI (0.69 crore shares) and construction company — Unitech (0.50 crore shares).
Telecom, auto shares lead 1% Sensex surge
Healthy auto and cement sales in May 2010 and buzz of strategic stake sale in Reliance Communications (RCom) helped domestic bourses shrug off weak global stocks. But, intraday volatility was immense. The BSE 30-share Sensex rose 169.81 points or 1.02%, up close to 170 points from the day's low and off close to 30 points from the day's high. The 50-unit S&P CNX Nifty regained the psychological 5,000 level after alternatively moving above and below that level in intraday trade. All the sectoral indices on BSE logged gains.
From a recent low of 16,022.48 on 25 May 2010, the BSE Sensex has gained 719.36 points or 4.48% in six trading sessions. From a recent peak of 17,970.02 on 7 April 2010, the Sensex is down 1,228.18 points or 6.83%. The Sensex has declined 722.97 points or 4.13% in the calendar year 2010 so far after jumping 81% in calendar 2009.
Volatility was high today. The market edged higher in early trade, tracking gains in some Asian stocks. It soon came off the higher level. The market shortly regained strength. It once again came off the higher level later. The Sensex briefly moved into negative zone in morning trade. The market shortly regained strength. The market moved in a narrow range in early afternoon trade.
The market regained strength in afternoon trade, soon after sharply cutting gains from the day's high in early afternoon trade. The market once again pared gains in choppy in mid-afternoon trade. Buying frenzy in index pivotals propelled key benchmark indices to the day's highs at the fag end of the trading session as US index futures climbed.
NSE's volatility index India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, declined 4.54% to 27.76. The index had declined 9.16% to 29.08 on Tuesday, 1 June 2010. 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.
The market breadth was strong. Telecom shares saw an across the board rally on hopes of merger and acquisition activity. Shares of state-run gas firms gained on reports the Centre has notified Cabinet decision to more than double the price of natural gas. Auto stocks were in limelight after robust sales figures for May 2010. Cement stocks rose after logging healthy monthly sales growth in May 2010.
Metal shares staged a comeback in late trade on bargain hunting after suffering losses in early trade. Banking and IT stocks saw mixed trend. Index heavyweight Reliance Industries was marginally lower, paring early gains.
European shares lost ground on Wednesday, pulled down by broad losses among commodity-sector companies and a further slide for oil major BP. The key benchmark indices in France, Germany and UK fell by between 0.75% to 1.29%.
Asian stock markets were mixed. The key benchmark indices in Taiwan, Japan and Hong Kong were down by between 0.13% to 1.28%. The key indices in China, Indonesia and Singapore rose by between 0.12% to 0.45%. South Korea's market was closed for local elections.
Japanese stocks fell in a roller coaster session after Prime Minister Yukio Hatoyama said he will step down. The Nikkei 225 average was down 1.12%.
US markets edged lower on Tuesday, 1 June 2010, in choppy trading prompted by fears of new banking problems in Europe and of a slowdown in Chinese growth. The Dow Jones industrial average fell 112.61 points, or 1.11%, at 10,024.02. The Standard & Poor's 500 Index dropped 18.70 points, or 1.72%, at 1,070.71 and the Nasdaq Composite index lost 34.71 points, or 1.54%, at 2,222.33.
In economic data, the ISM reported its manufacturing index dropped to 59.7 in May 2010 from 60.4 in April 2010, but remained in growth mode for a 10th straight month and beat expectations. A separate report showed construction activity rose the most in nearly a decade.
Global ratings firm Fitch Ratings on 28 May 2010 cut Spain's credit rating by one level to AA+ from AAA, saying the country's debt burden is likely to weigh on growth. Fitch cited an inflexible labor market and a restructuring of regional and local savings banks as hindrances to the pace of adjustment. Spain is struggling to lower debt amid a fiscal crisis that prompted the European Union to forge an almost $1 trillion loan package for its weakest economies.
Spain's downgrade follows similar cuts in ratings of Greece and Portugal recently as those nations attempt to grapple with debt problems by implementing austerity measures.
US index futures climbed in choppy trade. Trading in US index futures indicated that the Dow could rise 44 points at the opening bell on Wednesday, 2 June 2010.
Back home, Prime Minister Manmohan Singh highlighted 12 major areas of his intended priority on Tuesday, 1 June 2010, while releasing the first anniversary report of the UPA-II government at a function in New Delhi. These include relations with neighbours, economic resurgence, internal security, education, health, child rights, food security, empowerment of women, weaker sections and minorities and rural renewal. He added that the economy is expected to grow at 8.5% in the current financial year ending March 2011.
The Prime Minister identified price rise as one of the major problems faced by his government but assured to monitor the situation and take necessary corrective measures to rein in inflation. Singh said India must withdraw fiscal stimulus to boost economic growth and reduce deficit in a calibrated manner.
The Reserve Bank of India on Tuesday said inflation remained higher than its comfort level, signalling that the bank could raise interest rates further.
India's exports rose 36% to $16.9 billion in April 2010 over April 2009, the latest government data released on 1 June 2010 showed. Exports rose for the sixth consecutive month in May 2010 after registering a slide in 13 straight months. Imports rose 43% to $27.3 billion in April 2010 over April 2009. HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
Meanwhile, a revenue bounty for the government from the sale of telecom spectrum would help bring down fiscal deficit in the current financial year.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
The advance of the south west monsoon rains has been temporarily halted by a cyclonic depression in the Arabian Sea. Monsoon has covered Kerala and Tamil Nadu, but not moved beyond due to a cyclonic depression, according to agency reports. The weather office expects monsoon rains to advance to Karnataka later this weekend, by when the cyclone would weaken. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July.
The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. 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) on 26 May 2010, eased rules to boost liquidity at banks to avoid a cash crunch because of payments for corporate advance tax and license fees for third-generation mobile-phone spectrum. As per RBI's circular released on 26 May 2010, banks can borrow as much as 0.5% of their deposits from the central bank under the repurchase agreement till 2 July 2010. In addition, RBI said that as an ad hoc measure, banks can seek a waiver for any shortfall in maintenance of the prescribed 25% statutory liquidity ratio (SLR) while availing the temporary facility.
Besides, the central bank has decided to conduct two rounds of liquidity adjustment facility (LAF) operations till 2 July 2010. Through LAFs, that are conducted at least once a day, banks can avail of funds through the repo window or park surplus cash through the reverse repo route.
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.
China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development (OECD) said on 26 May 2010, revising upwards its growth outlook for all four largest emerging economies. The OECD revised India's GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand.
In its World Economic Outlook in April 2010, the International Monetary Fund (IMF) pegged India's GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was based on expectations of strengthening of domestic demand as the labour market improves. Expectations of increase in investment on the back of strong corporate profitability, rising business confidence and favourable financing conditions, were other factors cited by IMF for its prediction of strong growth in India's economy.
On the corporate front, the combined net profit of a total of 3,436 companies rose 14.20% to Rs 87,243 crore on 24.70% rise in sales to Rs 9,25,978 crore in the quarter ended March 2010 over the quarter ended March 2009.
The BSE 30-share Sensex rose 169.81 points or 1.02% to 16,741.84. The index rose 202.12 points at the day's high of 16,774.15 at the fag end of the trading session. The Sensex fell 0.58 points at the day's low of 16,571.45 in morning trade.
The S&P CNX Nifty gained 49.65 points or 1% to 5,019.85. Nifty hit a high of 5,031.20 at the fag end of the trading session.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,669 shares advanced as compared with 1,110 that declined. A total of 112 shares remained unchanged.
Among the 30-share Sensex pack, 23 advanced while only 7 of them declined.
The total turnover on BSE amounted to Rs 3708 crore, lower than Rs 4252.65 crore on Tuesday, 1 June 2010.
The BSE Mid-Cap index rose 0.85% and the BSE Small-Cap index rose 0.79%. Both the indices underperformed the Sensex.
All the sectoral indices on the BSE rose. The BSE Teck index (up 1.95%), Auto index (up 1.74%), Realty index (up 1.33%), and Capital Goods index (up 1.14%) outperformed the Sensex.
BSE Healthcare index (up 0.23%), Metal index (up 0.46%), FMCG index (up 0.47%), Power index (up 0.49%), Oil & Gas index (up 0.7%), Banking sector index Bankex (up 0.81%), Consumer Durables index (up 0.86%), PSU index (up 0.95%), IT index (up 0.97%), underperformed the Sensex.
Telecom shares saw an across the board rally on hopes of merger and acquisition activity. Shares of India's second largest listed cellular services provider by sales RCom jumped 11.02% to Rs 154.60 on reports United Arab Emirates-based Emirates Telecommunications Corporation (Etisalat) is in advanced talks to buy a 25% stake in Reliance Communications (RCom) for Rs 18,000 crore. It was the top gainer from the Sensex pack.
The stock rose on heavy volume of 1.08 crore shares on BSE. The average daily volume in the stock in the past one quarter to 28 May 2010 stood at 9.8 lakh shares
RCom clarified that it has been receiving various proposals from time to time from reputed international telecom companies expressing interest in acquiring a strategic equity stake in RCom. The company evaluates such proposals in line with the company's policy to constantly endeavor to enhance overall shareholder value, RCom said. The company will comply with all its obligations including timely disclosures at the appropriate time, RCom added.
India's largest listed cellular services provider by sales Bharti Airtel rose 5.16% and India's third largest listed cellular services provider by sales Idea Cellular Services gained 8.97%.
India's largest power utility firm Reliance Infrastructure surged 4.03% on reports the company has bagged a project worth Rs 2,960 crore for six-laning the Delhi-Agra highway from the National Highways Authority of India.
Shares of state-run gas firms rose on reports the Centre has notified Cabinet decision to more than double the price of natural gas produced by state-run firms from fields given to them without auctioning. The revised price of $4.20 per million British thermal units is effective from 1 June 2010.
India's largest oil exploration firm by sales Oil & Natural Gas Corporation shot up 3.32%. Oil India rose 0.92%.
Index heavyweight Reliance Industries (RIL) was flat at Rs 1011.90, after swinging in a band of Rs 1003.60 and Rs 1028 during the day. The Bombay Stock Exchange (BSE) said it was investigating trading in the stock after it plunged 20% in a few seconds before recovering most of its losses in intra-day trade on 1 June 2010.
Meanwhile, RIL is reportedly likely to make its first big-ticket investment in coal-fired power plants after getting freed recently from its non-compete agreement with the Anil Dhirubhai Ambani Group (ADAG) that barred it from investing in high-growth sectors.
Auto stocks advanced after unveiling robust sales figures for May 2010. India's largest tractor maker by sales Mahindra & Mahindra (M&M) gained 1.83%, extending five-day gains, as auto sales rose 69% to 28,486 units in May 2010 over May 2009.
India's largest small car maker by sales Maruti Suzuki India rose 1.47% after total sales rose 27.90% to 1,02,175 units in May 2010 over May 2009. The company's domestic sales rose 27.2% to 90,041 units in May 2010 over May 2009. This is highest ever monthly domestic sales. Exports increased 33.5% to 12,134 units in May 2010 over May 2009. The company announced the sales figures during trading hours on 1 June 2010.
India's top truck maker by sales Tata Motors advanced 2.6% after reporting 41% growth in vehicle sales in May 2010 over May 2009. The company sold 56,779 units in May 2010 as against 40,196 units sold in May 2009. The company unveiled the monthly sales data after trading hours on Tuesday, 1 June 2010.
India's largest bike maker by sales Hero Honda Motors spurted 3.28% on reports the company has raised prices of its products by up to Rs 1,000 with immediate effect due to rising input costs.
Banking stocks saw mixed trend. India's largest bank in terms of branch network State Bank of India rose 2.21%. India's largest private sector bank by sales ICICI Bank rose 0.57%
However, India's second largest private sector bank by sales HDFC Bank slipped 0.14% after its ADR declined 1.62% on Tuesday, 1 June 2010.
IT stocks saw mixed trend. India's second largest software services exporter by sales Infosys rose 0.72%. India's largest software services exporter by sales TCS rose 2.05%. But, India's third largest software services exporter by sales Wipro slipped 1.22% to Rs 650.05 after its ADR lost 2.32% on 1 June 2010.
Cement stocks rose after logging healthy monthly sales growth in May 2010. Jaiprakash Associates surged 2.09% after logging 63% jump in sales to 1.3 million tonnes in May 2010 over May 2009.
ACC rose 0.91%. The company recently said it is setting up a mega cement project of 3 million tonnes per annum at Ghughus in the Chandrapur district of Maharashtra at a cost of about Rs 1500 crore.
UltraTech Cement rose 3.52%. Aditya Birla Group's cement shipments rose 5.5% to 3.3 million tonnes in May 2010 over May 2009. Production rose 5.6% to 3.4 million tonnes. The group has decided to combine its cement operations under UltraTech Cement. The process is expected to be completed by July 2010.
Ambuja Cements advanced 2.99% after shipments rose 13.7% to 1.86 million tonnes in May 2010 over May 2009. Cement production rose 16.4% to 1.90 million tonnes.
Metal shares staged a comeback in late trade on bargain hunting after suffering losses in early trade triggered by a setback in metal prices on the London Metal Exchange on Tuesday. Sterlite Industries (up 0.81%), JSW Steel (up 0.21%), Tata Steel (up 0.85%), National Aluminium Company (up 1.24%), and Sesa Goa (up 2.64%), gained.
Infrastructure stocks gained on fresh buying. Larsen & Toubro (up 2.27%), Nagarjuna Construction Company (up 2.62%), Hindustan Construction Company(up 0.74%) and IVRCL Infrastructure (up 5.3%), edged higher.
Realty stocks also gained on fresh buying. Unitech, Ackruti City, DLF, HDIL, Ackruti City, Indiabulls Real Estate rose by between 0.03% to 3.86%.
Consumer durables stocks rose on bargain hunting. Blue Star, Videocon Industries, Gitanjali Gems and Rajesh Exports rose by between 0.82% to 3.68%.
Cals Refineries clocked the highest volume of 2.51 crore shares on BSE. FCS Software (1.13 crore shares), Reliance Communications (1.08 crore shares), Development Credit Bank (84.30 lakh shares) and Reliance Natural Resources (71.72 lakh shares) were the other volume toppers in that order.
Torrent Pharma clocked the highest turnover of Rs 235.97 crore on BSE. Reliance Communications (Rs 167.30 crore), Tata Steel (Rs 157.64 crore), Sesa Goa (Rs 120.72 crore) and Tata Motors (Rs 98.36 crore) were the other turnover toppers in that order.
Bears freak out!
A man who has committed a mistake and doesn't correct it, is committing another mistake.-Confucius
As if the world and its worries were not enough, a freak trade in Reliance Industries took place which saw the index heavyweight plunge to Rs840.55 during the day.
The bulls may find some relief this morning as the market gets off to a flat start.
India’s exports increased by 36.2% to US$16.8bn in April, the sixth consecutive month of growth. Auto numbers have been very encouraging in May.
Better-than-expected readings on the US economy failed to cheer the main US indices. The weakness was attributed to slower manufacturing growth in China besides reports that Israel's aircraft were targeted by Lebanese anti-aircraft guns. BP shares fell 15% as it battles with the worst oil spill in US history.
The euro, which has been at the receiving end flirted with fresh four-year lows of US$1.21. The yen weakened after Japanese Prime Minister Yukio Hatoyama said he would resign in eight months. The Bank of Canada raised rates and chances are New Zealand would do the same next week.
Market may edge higher on positive global cues
The market is likely to open higher tracking gains in Asian stocks. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicated that the Nifty could rise 20.50 points at the opening bell.
Reliance Industries may see action after the Bombay Stock Exchange (BSE) said it was investigating trading in the stock after it plunged 20% in a few seconds before recovering most of its losses in intra-day trade on 1 June 2010.
Japanese stocks led a recovery in Asian stocks after resignation of Japan's prime minister Yukio Hatoyama prompted a drop in the yen, boosting the earnings outlook for Japanese exporters. The key benchmark indices in Hong Kong, Indonesia, Singapore, Japan and Taiwan were up by between 0.03% to 1.27%. However, China's Shanghai Composite declined 0.60%.
US markets edged lower on Tuesday, 1 June 2010, in choppy trading prompted by fears of new banking problems in Europe and of a slowdown in Chinese growth. The Dow Jones industrial average fell 112.61 points, or 1.11%, at 10,024.02. The Standard & Poor's 500 Index dropped 18.70 points, or 1.72%, at 1,070.71 and the Nasdaq Composite index lost 34.71 points, or 1.54%, at 2,222.33.
In economic data, the ISM reported its manufacturing index dropped to 59.7 in May 2010 from 60.4 in April 2010, but remained in growth mode for a 10th straight month and beat expectations. A separate report showed construction activity rose the most in nearly a decade.
Global ratings firm Fitch Ratings on 28 May 2010 cut Spain's credit rating by one level to AA+ from AAA, saying the country's debt burden is likely to weigh on growth. Fitch cited an inflexible labor market and a restructuring of regional and local savings banks as hindrances to the pace of adjustment. Spain is struggling to lower debt amid a fiscal crisis that prompted the European Union to forge an almost $1 trillion loan package for its weakest economies.
Spain's downgrade follows similar cuts in ratings of Greece and Portugal recently as those nations attempt to grapple with debt problems by implementing austerity measures.
Back home, India's exports rose 36% to $16.9 billion in April 2010 over April 2009, the latest government data released on 1 June 2010 showed. Exports rose for the sixth consecutive month in May 2010 after registering a slide in 13 straight months. Imports rose 43% to $27.3 billion in April 2010 over April 2009.
HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
Meanwhile, a revenue bounty for the government from the sale of telecom spectrum would help bring down fiscal deficit in the current financial year.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
The advance of the south west monsoon rains has been temporarily halted by a cyclonic depression in the Arabian Sea. Monsoon has covered Kerala and Tamil Nadu, but not moved beyond due to a cyclonic depression, according to agency reports. The weather office expects monsoon rains to advance to Karnataka later this weekend, by when the cyclone would weaken. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July.
The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. 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.
Prime Minister Manmohan Singh in late May 2010 said inflation is showing signs of moderating and the government expects to achieve a medium term target of 10% GDP growth annually. The Prime Minister said he expects inflation to moderate to 5-6% by December 2010. Singh expects 8.5% GDP growth in the year ending March 2011 (FY 2011).
The Reserve Bank of India (RBI) on 26 May 2010, eased rules to boost liquidity at banks to avoid a cash crunch because of payments for corporate advance tax and license fees for third-generation mobile-phone spectrum. As per RBI's circular released on 26 May 2010, banks can borrow as much as 0.5% of their deposits from the central bank under the repurchase agreement till 2 July 2010. In addition, RBI said that as an ad hoc measure, banks can seek a waiver for any shortfall in maintenance of the prescribed 25% statutory liquidity ratio (SLR) while availing the temporary facility.
Besides, the central bank has decided to conduct two rounds of liquidity adjustment facility (LAF) operations till 2 July 2010. Through LAFs, that are conducted at least once a day, banks can avail of funds through the repo window or park surplus cash through the reverse repo route.
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.
China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development (OECD) said on 26 May 2010, revising upwards its growth outlook for all four largest emerging economies. The OECD revised India's GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand.
In its World Economic Outlook in April 2010, the International Monetary Fund (IMF) pegged India's GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was based on expectations of strengthening of domestic demand as the labour market improves. Expectations of increase in investment on the back of strong corporate profitability, rising business confidence and favourable financing conditions, were other factors cited by IMF for its prediction of strong growth in India's economy.
The combined net profit of a total of 3,416 companies rose 14.2% to Rs 87,238 crore on 24.7% rise in sales to Rs 9,25,841 crore in the quarter ended March 2010 over the quarter ended March 2009.
The key benchmark indices suffered a severe setback in the second half of the trading session on Tuesday, 1 June 2010, as slowdown in Chinese manufacturing growth pulled world stocks sharply lower. The BSE 30-share Sensex fell 372.60 points or 2.2% to 16,572.03 and the S&P CNX Nifty declined 116.10 points or 2.28% to 4,970.20.
From a recent low of 16,022.48 on 25 May 2010, the BSE Sensex had gained 922.15 points or 5.75% in four trading sessions to 16,944.63 on 31 May 2010.
As per the provisional data from the stock exchanges, foreign institutional investors (FIIs) sold stocks worth a net Rs 526.49 crore while domestic funds bought equities worth a net Rs 210.62 crore on 1 June 2010.
Latest Grey Market Premiums - June 2 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Standard Chartered PLC | 104 | Discount |
| Fatpipe Networks India Ltd. | 82 to 85 | 4 to 4.50 |
Stocks set to begin on a flat note
Headlines for the day:
GVK PIL arm gets BOT project
Surya Pharma to raise Rs500 crore
Apollo Tyres marches into Europe with local brands
NTPC- Kaniha to import over 13 lakh tonne of coal in 2010-11
Events for the day:
Major corporate action
Ex-date for right issue of Comfort Intech
For more events, log on to Sharekhan.com
Pre-market report
Global signals
The European shares recovered from steep losses to close slightly higher on Tuesday (June 01, 2010), as strong US data helped to ease investors' worries about the global economic recovery, though British Petroleum fell heavily.
The US stocks fell on Tuesday as energy shares slid after the latest failed attempt to halt the oil spill in the Gulf of Mexico and the US government announced a criminal probe into the disaster.
In today's trade, the Asian markets were trading on a mixed note. At the time of writing this report, SGX Nifty was trading 19 points higher.
Indian Indices
Yesterday, the benchmark indices broke its four-day winning streak and ended session in red due to profit booking and heavy sell-off across the globe.
The Asian markets were trading mixed as Wall Street's losses weighed on overall sentiment. Better-than-expected readings on the US economy failed to cheer the main US indices.
The bulls may find some relief this morning as the market gets off to a flat start.
The India's exports rose 36% to $16.9 billion and the imports surged 43% to $27.3 billion in April 2010. Auto numbers have been very encouraging in May.
Commodity cues
In the commodity space, the crude oil prices fell after downbeat overseas manufacturing data raised concerns that global fuel demand will remain low, with the Nymex light crude oil for the July series declined by $1.39 per barrel, whereas in the metals space, the Comex Gold for the July series rose by $12.60 to a troy ounce and the Comex Silver for the July series was up by $0.13 to a troy ounce.
Daily trend of FII/MF investment in equities
On June 01, 2010, the foreign institutional investors (FIIs) were the net buyers of the Indian stocks to the tune of Rs800.60 crore, whereas the domestic mutual funds, on May 31, 2010, were the net sellers of the stocks to the tune of Rs6.10 crore.
Daily News Roundup - June 2 2010
Reliance Industries, freed from its non-compete agreement with the ADAG that barred it from investing in high-growth sectors, is likely to make its first big-ticket investment in coal-fired power plants. (ET)
After 19 months of announcing a relocation of the Nano plant from Singur in West Bengal to Sanand in Gujarat, Tata Motors is set to roll out the world's cheapest car from its new abode. (BL)
Japanese auto major Nissan Motor Company today said it may partner with Hinduja Group flagship firm Ashok Leyland for launching a global compact car in India. (ET)
Macquarie-SBI was in advanced negotiations with GMR Infra to invest US$100mn in the latter’s airports division. (BS)
NTPC’s Kaniha power plant is presently reeling under a super critical condition, with coal stock of about 0.2mt which would last for only three days. (BS)
Singareni Collieries Company Limited, which is setting up a 600MW in Jaipur mandal of Adilabad district, would place orders for the power plant equipment from BHEL in July. (BS)
Axis Bank has cut the interest rate on fixed deposits of two years to 30 months by 25 bps to 7.0% and on 30 months to three years maturity by 50 bps to 7.0%. (BS)
Bank of Ireland has shortlisted HCL Technologies and IBM for an outsourcing contract potentially worth over US$600mn, replacing incumbent vendor HP, which had signed a seven-year deal with the bank in 2004. (ET)
Reliance Infrastructure won Rs29.6bn project from the NHAI for the six-laning of the 180-km Delhi-Agra road. (ET)
Reliance Power plans to invest close to Rs100bn to ramp up the capacity of its 220-MW Samalkot project in East Godavari district of Andhra Pradesh to 2,400 MW. (BL)
Suzlon Energy plans to repay its debt by raising funds through rights issue of 2 equity shares for every 15 shares held at Rs63/share. (ET)
Unitech has ended its joint venture with its Mumbai partner Omkar Group for slum rehabilitation projects. (FE)
Etisalat DB, the joint venture between UAE's Etisalat Group and Indian real estate firm DB Group, announced the soft launch of its mobile services in 15 circles. (BL)
India’s exports increased by 36.2% to US$16.8bn in April, the sixth consecutive month of growth. (ET)
As the government cut duties and stepped up public expenditure, its fiscal deficit rose by 24.9% to Rs4.1trn in 2009-10 compared to the year ago period. (ET)
The government has agreed to allow import of Chinese-made telecom gear, certified by international security audit firms such as Canadas Electronic Warfare Associates, US-based Infoguard and Israels ALTAL Security Consulting, till a dedicated certification centre and test lab is in place. (ET)
On the lines of the 3G spectrum auction, competition for BWA is hotting up, with the bid for pan-India licence touching Rs79.4bn on the seventh day of the auction. (ET)
The Delhi High Court has asked telecom companies to submit their account books to the Comptroller and Auditor General of India. (ET)
The power ministry plans to allow 15-year KG gas pact for new power plants. (ET)
The government is considering to provide greater autonomy to 12 top state-owned ports by converting them into corporates to help them compete better with international players. (FE)
With more SEZs becoming operational, the Centre will consider on June 8 framing rules that would allow migration of units from one SEZ to the other. (FE)
The government is considering to price domestic coal on par with global rates, a move which may increase the cost of the raw material and fuel rise in power tariff. (FE)
Freak Day...Nifty ends below 200DMA
It was a freak day for the Indian markets as an alleged trading error in index bellwether Reliance Industries spooked the sentiment in afternoon trade. Also undermining the mood was renewed weakness in global markets amid worries about China’s slowing economy and BP’s inability to plug the oil spill in the Gulf of Mexico.
Meanwhile, the euro re-tested a four year low against the dollar after the European Central Bank said yesterday there may be more bank losses as the credit crisis spreads.
"The NSE Nifty lost over 100 points in a single trading session after rising by close to 300 points in the last four sessions. The Nifty reversed sharply from its 100DMA and closed below its long term moving average (200DMA)" says Amar Ambani, Vice President Research IIFL.
In a bizarre turn of events, shares of Reliance Industries were seen hitting an intra-day low of Rs840 on the BSE, where nearly 0.5mn shares were offloaded in a freak trade. Finally, the BSE 30-share Sensex slipped 372 points at 16,572 and NSE Nifty fell 116 points at 4,970.
Markets in Asia ended in the red; the Nikkei in Japan fell by 0.6%, Australia's S&P/ASX slipped by 0.3% and while the Hang Seng index in Hong Kong fell 1.3%.
European indices were trading in the red as well, the DAX in Germany was down 1.7%, the CAC 40 index in France was down 2.5% and the FTSE in the UK was down 2.2%.
All the BSE sectoral indices ended in the negative terrain, BSE Metal index was the top loser, the index was down 4%, followed by BSE Realty index was down 3% and BSE Oil & Gas index was down 2.5%. Even the BSE Mid-Cap index ended loser by 1.3% and the Small-Cap index edged lower by 1%.
Outside the frontline indices, the big losers in the broader market were Fortis Healthcare, Century Tex, Bhushan Steel and Indian Bank. On the other hand, gainers included Chambal Fert, Container Corp, Renuka Sugars and Madras Cement.
Precious metals shine
Gold and silver gain as euro drops to four-year lows
Yellow metal prices ended higher for sixth straight day on Tuesday, 01 June 2010. Prices rose as problems in the euro zone lingered and the euro dropped to four-year low levels. Strong manufacturing data on the US front also perked up prices. Markets were closed yesterday in observance of Memorial Day.
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 August delivery ended at $1,226.9 an ounce, higher by $11.9 (1%) an ounce on the New York Mercantile Exchange. 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 3.3%. Gold ended May higher by 3%. 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 11.7%.
On Tuesday, July Comex silver futures ended higher by 12.9 cents (0.7%) at $18.551 an ounce. Last week, silver ended higher by 4.3%. For May, silver shed 1.1%. 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 on Tuesday, the euro shed almost 2% against the dollar and fell to its lowest levels in more than four years on concerns that the euro zone problems will slow down the overall recovery of that region.
Among economic reports for the day, it was seen that activity in U.S. manufacturing slowed a bit in May after hitting a six-year high in April but still showed considerable momentum. The Institute for Supply Management index fell to 59.7% in May from 60.4% in April. This was above the 59% reading expected. Readings over 50% in the ISM diffusion index indicate that more firms are growing than contracting. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better this month than last.
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 August delivery closed higher by Rs 318 (1.72%) at Rs 18,716 per ten grams. Prices rose to a high of Rs 18,815 per 10 grams and fell to a low of Rs 18,434 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 311 (1.06%) higher at Rs 29,603/Kg. Prices opened at Rs 29,320/kg and rose to a high of Rs 29,755/Kg during the day's trading.
Crude continues to glide down
Demand concerns weigh on crude prices
Crude oil prices ended lower at Nymex on Tuesday, 01 June 2010. Though prices had started the day lower, it inched up higher during the course of the day but the rise was short lived and prices fell again. Prices dropped due to demand concerns for energy across the globe.
On Tuesday, crude-oil futures for light sweet crude for July delivery closed at $72.58/barrel (lower by $1.39 or 1.9%). Last week, crude gained 5.6%.
For the month of May, crude shed 14%. It was the biggest monthly drop for crude since December 2008. 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 higher by 3.1%.
In the currency market on Tuesday, the euro shed almost 2% against the dollar and fell to its lowest levels in more than four years on concerns that the euro zone problems will slow down the overall recovery of that region.
Among economic reports for the day, it was seen that activity in U.S. manufacturing slowed a bit in May after hitting a six-year high in April but still showed considerable momentum. The Institute for Supply Management index fell to 59.7% in May from 60.4% in April. This was above the 59% reading expected. Readings over 50% in the ISM diffusion index indicate that more firms are growing than contracting. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better this month than last.
Separately, the Commerce Department in US showed that construction spending increased 2.7% in April, the biggest gain in nearly 10 years.
Fitch Ratings on last Friday downgraded Spain's debt to AA+ from AAA, citing concerns about the country's level of debt relative to its gross domestic product.
Among other energy products on Tuesday, reformulated gasoline for July delivery lost 4 cents, or 2.2%, to settle at $1.98 a gallon on Nymex.
Natural gas for July delivery declined 9 cents, or 2.1%, to $4.24 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 June delivery closed higher by Rs 23 (0.66%) at Rs 3,487/barrel. Natural gas for June delivery closed at Rs 202.3, lower by Rs 1.5 (0.73%).
MRPL
Investors with short-term trading perspective can consider selling the stock of Mangalore Refinery and Petrochemicals Ltd (MRPL). Since June 2009 high of Rs 102, the stock has been on an intermediate-term downtrend. In April 2010, the stock encountered significant resistance around Rs 84 and its downtrend accelerated thereafter. It has been on a medium-term downtrend too since April. The stock conclusively broke through its important long-term support level of Rs 70 during the third week of May by tumbling almost six per cent. At present, this support level has turned into a key resistance level for the stock. It is trading well below its 21 and 50-day moving averages. The daily relative strength index has re-entered into the bearish zone from the neutral region, whereas the weekly RSI is featuring in the bearish zone. Both daily and weekly moving average convergence and divergence indicators are hovering in the negative territory. These facts reinforce bearish sentiment on the stock. Our short-term forecast is bearish. We expect the stock to decline further until it hits our price target of Rs 63 in the upcoming sessions. Short-term traders can, hence, sell the stock with the stop at Rs 69.
via BL
Subscribe to:
Posts (Atom)