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Grey Market Premiums - Apr 4 2012

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)	Kostak (Rs. 2 Lac Application)	Kostak (Rs. 5 Lac Application)
REC	1000	-20 to -25 (Discount)	--	--	--
NBCC	106	2.50 to 3 (Seller)	--	--	--
MT Educare Ltd	74 to 80	3.50 to 4

Daily News Roundup - Apr 4 2012

The government issued a presidential decree to force Coal India to guarantee long-term fuel supply to private power firms, as it used its discretionary authority to trump independent directors who resisted pressure from the Prime Minister’s Office and said such pacts would harm the company.(ET)

Cairn Energy India Pty Ltd has notified the Government of an oil discovery in the Nagayalanka well in the onshore block of the Krishna-Godavari Basin. (BL)

Damodar Valley Corporation (DVC) has raised Rs.44bn through an issue of 9.3 % 15-year bonds.(BL)

Sensex spurts for third straight session

The Indian stock markets extended their winning streak to a third straight trading session on Tuesday. After opening with a positive bias, the benchmark indices surged even higher, with the NSE Nifty moving towards the 5400 mark. However, the Nifty was unable to breach the psychological level as selling in Pharma, Auto and select IT stocks dragged the markets from day's high. A reversal in the European markets from a good start also weighed on the sentiment.

The BSE Sensex ended at 17,597, up 119 points or ~0.7% over the previous close. It had earlier touched a day’s low of 17,570 and a day’s high of 17,664. It opened at 17,576. The NSE Nifty settled at 5,359, up 41 points or 0.8% over the previous close. It earlier touched a day’s low of 5,344 and day’s high of 5,379.

Summer of discontent

One swallow doesn’t make a summer. – A popular proverb.

Although the start to April has been good, we still have a long way to go in the summer. The opening today is likely to be lower due to weakness across global markets. The minutes of the last FOMC meeting shows reduced chance of QE3 as of now. European shares fell amid worries about Spain’s worsening fiscal health.

One shouldn’t get carried away by the positive start to April as equities continue to face a spate of problems. The high and rising twin deficits are a major cause for concern. The maiden Government bond auction of FY13 has been a dampener.

Precious metals witness mixed finish

Gold ends lower following Fed's comments

Bullion metal prices ended mixed on Tuesday, 03 April 2012 at Comex. Comex gold futures ended the U.S. day session lower while silver prices advanced. Comex gold futures prices traded sharply lower in afternoon trading on Tuesday, in a strongly bearish response to the afternoon release of the minutes of the last Federal Open Market Committee meeting of the U.S. Federal Reserve. The key “outside markets” were also bearish for the precious metals on Tuesday, as the U.S. dollar index was higher and crude oil prices were lower. Silver traded lower alongside gold earlier but changed course in the mid morning hours.



Gold for June delivery ended lower by $7.7 or 0.5%, to end at $1,672 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. The metal had spent most part of the earlier week in the red. That brought first quarterly gains of gold to 6.7%. For March 2012, gold declined 2.3%.

On Tuesday, silver prices for May delivery ended higher by $0.17 or 0.5% at $33.27. Silver gained 6.5% during February 2012. On the first quarter, silver jumped 16%, which follows three quarters of losses in 2011. For the month of March, silver declined 6%.

A sleepy market place got a bucket of cold water thrown in its face in afternoon trading on Tuesday when the latest FOMC minutes were released and hinted further that any additional quantitative easing from the U.S. central bank is not likely. Some FOMC members even pondered at what point to begin to look at raising U.S. interest rates. That news sent the U.S. dollar index solidly higher and many commodity futures markets, including gold lower.

Part of gold's strength in recent years has been expectations of more inflation and continued monetary stimulus by the Fed.

In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.7%. It was essentially trading flat for the entire morning and rose only after Fed's comments.

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. But bullions have registered increase in prices despite strong dollar in recent times and vice versa.

Additionally, reports this week say India's gold imports have declined by around two-thirds from this time last year, due to a gold retailers' strike to protest additional government taxes on gold. The gold retailers are continuing to protest and are now asking the Indian government to at least reduce the new tax increase on the yellow metal. This situation has been a bearish drag on gold the past few weeks.

At Wall Street, The Commerce Department in US reported that orders for goods produced in U.S. factories rose 1.3% in February, 2012. Market had expected orders to climb 1.5%. Factory orders were revised down to a 1.1% decline in January from a prior estimate of a 1.0% drop.

At the MCX, gold prices for June delivery closed lower by Rs 112 (0.39%) at Rs 28,445 per ten grams. Prices rose to a high of Rs 28,579 per 10 grams and fell to a low of Rs 28,420 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed lower by Rs 28 (0.04%) at Rs 57,567/Kg. Prices opened at Rs 57,550/kg and fell to a low of Rs 57,103/Kg during the day's trading.

Crude ends lower

Prices slip due to demand concerns arising from Fed's latest FOMC minutes

Crude prices ended lower on Tuesday, 03 April 2012 at Nymex. Prices fell following the latest FOMC minutes which hinted that more monetary or quantitative easing is unlikely thereby curbing the hopes of higher oil demand in coming months. The same pushed dollar higher and that too affected prices.

Light and sweet crude for May delivery fell $1.22 (1.2%) to $104.01 a barrel on the New York Mercantile Exchange on Tuesday.

Copper ends marginally lower

Surge in stockpiles and latest FOMC minutes keep prices low

Copper prices ended lower on Tuesday, 03 April 2012 at Comex. Copper edged lower in thin conditions on Tuesday, backing away from a near two-month high as another large build in warehouse stockpiles withdrew some of the bullish momentum from Monday's upbeat U.S. and Chinese manufacturing data. It was the first down day for copper in the last three trading sessions.

Copper for May delivery ended lower by 0.2 cents (0.1%) at $3.92 a pound at Comex on Tuesday. It fluctuated between $3.89 and $3.94 throughout the day. First quarterly gains for copper reached 11%. Monthly, however, copper declined 1.3% in March.

Market may open lower on weak Asian stocks

The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 25 points at the opening bell. Asian stocks fell today after minutes from the Federal Reserve's latest interest-rate setting meeting showed less need for more asset buying

Reliance Industries (RIL) and FMCG major Hindustan Unilever have reportedly entered into tie-up to collaborate in setting up a chain of beauty and wellness formats across the country. Reports stated that the beauty and wellness formats will be started in Reliance Hypermarkets in May.

Markets expect a negative start as Fed disappoints

The Indian markets may open on a negative note led by negative global cues and disappointing US Federal reserve meeting.

Headlines for the day:

Everonn Education founder sells 4.98% stake.
BHEL open to collaborations with Chinese firms.
188 cos default on financial commitments in FY12: Crisil .
RIL gas output from KG-D6 block drops to 34 mmscmd.
Steel makers hike prices by up to Rs1,500 per tonne.

SGX Nifty Live Update - Apr 4 2012

5349.25 -32.75 (-0.61%)