Sunday, July 17, 2011
After prolonged uncertainty, the policy environment for fertiliser producers has turned more friendly in the last two years. Makers of phosphatic and complex fertilisers, in particular, have seen their prospects get a boost from the change-over to a nutrient based subsidy (NBS) system in April 2010, a shift to cash subsidy payments and, recently, signs of the government loosening its iron grip on selling prices.
India's annual inflation surged in June from the previous month after the Government allowed state-run oil companies to hike the prices of diesel, LPG and kerosene for the first time in a year, data released by the Government showed. Inflation, as measured by the wholesale price index (WPI), rose to 9.44% in June from 9.06% in May, the Union Commerce & Industry Minister said. Average expectation was for inflation to rise to 9.7%. The Government revised upwards inflation rate for April to 9.74% from the provisional reading of 8.66%. The official WPI for ‘All Commodities’ for June rose by 0.9% to 153.0 from 151.7 in the previous month. Annual inflation was at 10.25% during the corresponding month of the previous year. Build up inflation in the financial year so far (April-June) was 2.34% compared to a build up of 2.57% in the corresponding period of the previous year.
Gold posts positive returns in Q2 2011, while commodities suffer major price correction. Low volatility and measured price performance during Q2 demonstrates further gold’s role as a unique asset class. The World Gold Council releases its Gold Investment Digest, analysing the current economic and financial drivers of the global gold market. The Q2 2011 report shows that gold outperformed most major assets, including commodities, throughout the quarter. In addition, gold’s low average volatility of 13.4% for the quarter is well below its long-term 20-year average of 15.8%. Juan Carlos Artigas, Investment Research Manager at the World Gold Council, commented: "While commodities exhibited heightened levels of volatility and sharp falls in price during the month of May, gold’s volatility was modest and its price remained stable.
Yet another eventful week has passed, with the key indices losing ~1.5% due to selloff on the first couple of days. Though there was a big rally on Wednesday, the momentum lost steam on the last two days. IIP, Infosys results and Inflation report soured the mood while the Cabinet reshuffle was a non-event. Bajaj Auto’s results also disappointed as its margins contracted. But, TCS reported blowout earnings and the management sounded extremely confident.