Friday, December 16, 2011
Today’s opening is likely to be on a flat note as cautious trade is expected ahead of the RBI policy.
Headlines for the day
R-Cap in talks to buy majority stake in Bloomberg UTV
IOC cuts domestic jet fuel prices by Rs920/kl
JSW Energy ups stake in S African coal firm
RBI reduces net open position limits for dealers in FX mkt
Oil companies reduce ATF price by 1.3%
Kingfisher to cut flights to Himachal
Arvind Ltd has announced the formation of a JV with the PD Fiber Glass Group for the manufacture of glass fabrics in India with an investment of Rs800mn over the next 5 years. (BL)
Adani Power Ltd is set to bring on stream the entire 4,620-MW proposed thermal power capacity at Mundra by February. (BL)
Mahindra & Mahindra has announced a price rise of up to 3% across its passenger vehicle, commercial vehicle and tractor range, effective from next month. (BL)
Tata Motors’ global wholesales, including the Jaguar Land Rover (JLR) brand, rose 35% to 1.08 lakh units in November 2011. (BL)
It could well have been worse for Indian markets but for the late afternoon recovery. The start was pretty bad and it looked like another disappointing session before the ‘U’ turn in afternoon. The main indices didn’t exactly set the screens afire but the pull back was commendable nevertheless. The Indian rupee, which breached the 54 mark versus the dollar and hit a new low also recovered on suspected RBI intervention.
The main trigger for the recovery was positive opening in the European markets and the euro rising back above $1.30. Third-quarter advance tax numbers from some of the top corporates also lent good support as did a sharp drop in food inflation. Advance tax paid by the top 100 Indian companies is said to have increased by 10% in the third quarter. That is in line with the growth registered in the second quarter.
When you discover your mission, you will feel its demand. It will fill you with enthusiasm and a burning desire to get to work on it.- W. Clement Stone.
Earlier RBI’s mission may have been mostly fighting inflation. For now, the RBI governor has to fight many battles simultaneously as he meets his colleagues to review the monetary policy. The backdrop is quite bleak given the intensity of local and global headwinds; rising government borrowings, falling rupee, slowdown in growth and overseas uncertainty to mention a few.
Gold drops for third straight day but silver edges up
Precious metals ended mixed on Thursday, 15 December 2011 at Comex. Comex February gold futures prices turned lower for third straight day while silver rose. Comex February gold futures prices ended the U.S. day session lower on follow-through selling pressure from Wednesday's sharp losses that did rattle traders and investors. March silver futures prices closed nearer the session high on Thursday but did hit a fresh 2.5-month low early on. Silver prices have been trending lower in a choppy fashion for six weeks.
Gold for February delivery ended lower by $9.7 or 0.6%, to end at $1,577.2 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.
Prices fell despite a flat dollar and better than expected economic reports
Crude prices ended modestly lower on Thursday, 15 December 2011 at Nymex. Prices fell despite a flat dollar and better than expected economic reports. Prices continued with their prior session's decline when crude prices had slumped more than $5 at one single session.
Light and sweet crude for January delivery fell $1.08 (1.1%) to $93.87 a barrel on the New York Mercantile Exchange on Thursday. Last week, crude lost 1.5%. For the month of November, oil futures gained 7.7%.
The market may open flat to slightly higher on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 5 points at the opening bell.
The Reserve Bank of India (RBI) is widely expected to hold its key policy rate steady after a mid-quarter review of the monetary policy today, 16 December 2011. The RBI had announced a 25 basis points hike in its key policy rate viz. the repo rate to 8.5% after half-yearly review of the monetary policy on 25 October 2011. The central bank cut its GDP growth forecast for the current fiscal year through March 2012 to 7.6% from 8% earlier. But it retained its March-end inflation projection of 7%. Interest rate sensitive banking, realty and auto stocks will be in focus ahead of RBI's monetary policy.
The European shares rose in thin volume on Thursday (December 15, 2011) as technical factors pointed to oversold levels, while a Spanish bond auction produced good demand and U.S. data helped improve sentiment on the global economy.
The US stocks gained on Thursday, snapping a three-day losing streak, after investors took heart from stronger US economic data, but finished off session highs after another warning about Europe's sovereign-debt crisis.
The Asian indices edged up on Friday (December 16, 2011), as signs of strength in the US economy temporarily broke through gloom over the European debt crisis that had driven a sell-off in riskier assets over the past three days. SGX Nifty was trading 4 points lower.