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Wednesday, July 16, 2008
Crude pressures bullion metals
Bullion metals witness extreme volatility but end mixed
Lower crude price pressured bullion metals today, Tuesday, 15 July, 2008 as the energy prices witnessed greatest one day drop in seventeen years. The increase in energy costs generally increases demand for the precious metal as a hedge against inflation and vice versa. Silver prices fell for the day.
Comex Gold for August delivery rose $5 (0.65%) to close at $978.7 ounce on the New York Mercantile Exchange. Prices climbed to a high of $988.6 during intra day trading and also fell to a low of $969.3. Last week, it ended higher by $27 (2.8%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
On Tuesday, Comex silver futures for September delivery fell 24 cents (1.1%) to $19.01 an ounce. Silver has gained 28% in 2008 till date. For the second quarter, it gained a paltry 1.4%.
In the Wall Street today, Federal Reserve Chairman Ben Bernanke said that the U.S. economy is facing "significant" risks to growth, while the Organization of the Petroleum Exporting Countries lowered its forecast for world oil-demand growth for 2008 and 2009.
At the currency markets on Tuesday, the dollar got some support from falling crude-oil futures but remained under pressure retreating after Bernanke cited downside risks to economic growth in a speech that followed a spate of lackluster data. The dollar dropped to a new low against the euro earlier, before Bernanke spoke on Capitol Hill. The dollar index which measures the greenback against a basket of six major currencies, fell 0.4% to 71.73.
In the crude market on Tuesday, crude futures closed down more than $6 a barrel, the biggest daily drop in more than 17 years, as concerns that slowing economic growth will dampen oil demand triggered a broad sell-off in energy commodities. Crude futures for August delivery ended at $138.74 a barrel on the Nymex, down 4.4%, or $6.44, the biggest one-day drop in price for a front-month contract since January, 1991. Earlier, the contract slumped $9.26, or 6.3%, to an intraday low of $135.92.
The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices.
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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.
Gold prices ended June, 2008 with a gain of 4.1%. The yellow metal ended second quarter with a marginal gain of 0.7%. In May, it ended with a gain of higher by $22.5 (2.5%). Before May, for April, prices closed lower by 6.3%.
This year, gold prices have gained 16.7% till date against a 5.2% drop for the dollar against the euro. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
Silver prices ended the month of May 2008 with a gain of 2.7%. For April, it closed lower by 5.5%. Silver had gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
During last week of June, Federal Reserve yesterday sharpened its focus on inflation, saying that the upside risks to inflation have increased. Fed held its target for short-term interest rates steady at 2%.
Since last September, Fed has axed interest rates seven times and brought it down to 2%. On the other hand, after keeping interest rates unchanged at 4% since June, 2007, ECB hiked the same to 4.25% last month.
Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for August delivery closed higher by Rs 78 (0.6%) at Rs 13,560 per 10 grams. Prices rose to a high of Rs 13,764 per 10 grams and fell to a low of Rs 13,475 per 10 grams during the day’s trading.
At the MCX, silver prices for September delivery closed Rs 228 (0.85%) lower at Rs 26,481/Kg. Prices opened at Rs 26,700/kg and fell to a low of Rs 26,175/Kg during the day’s trading.
Crude falls deepest in 17 years!
Prices witness the greatest one day drop in seventeen years
Crude oil prices witnessed the maximum one day fall in seventeen years today, Tuesday, 15 July, 2008. Prices plunged among overall concerns regarding growth in US and worldwide. Also, the Organization of the Petroleum Exporting Countries lowered its forecast for world oil-demand growth for 2008 and 2009 today. Prices witnessed considerable volatility throughout the day.
Crude-oil futures for light sweet crude for August delivery today closed at $138.74/barrel (lower by $6.44/barrel or 4.4%) on the New York Mercantile Exchange. It rose by $1 earlier in the day but then fell $9.3 to an intraday low of $135.92 in overnight electronic trading. Last week, prices gained $0.21 (0.2%).
Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Prices are 105% higher than a year ago. For the year, crude is up by 45% till date.
In the Wall Street today, Federal Reserve Chairman Ben Bernanke said that the U.S. economy is facing "significant" risks to growth, while the Organization of the Petroleum Exporting Countries lowered its forecast for world oil-demand growth for 2008 and 2009.
OPEC issued its monthly report today, lowering its forecast for world oil-demand growth for 2008 to 1.03 million barrels a day, which represents a decline of 70,000 barrels from its previous estimate. Global oil demand this year is expected to average 86.81 million barrels a day. Earlier this month, the Energy Information Administration projected that U.S. petroleum consumption will shrink by 400,000 barrels a day in 2008, 38% more than EIA's June projection of a decline of 290,000 barrels.
At the currency markets on Tuesday, the dollar got some support from falling crude-oil futures but remained under pressure retreating after Bernanke cited downside risks to economic growth in a speech that followed a spate of lackluster data. The dollar dropped to a new low against the euro earlier, before Bernanke spoke on Capitol Hill. The dollar index which measures the greenback against a basket of six major currencies, fell 0.4% to 71.73.
Against this backdrop, August reformulated gasoline tumbled 20 cents, or 5.6%, to $3.38 a gallon, and August heating oil lost 14 cents, or 3.4%, to $3.92 a gallon. August natural-gas futures fell 48.2 cents, or 4%, to $11.48 per million British thermal units.
At the MCX, crude oil for July delivery closed at Rs 5,964/barrel, lower by Rs 242 (3.9%) against previous day’s close. Natural gas for July delivery closed at Rs 493.7/mmbtu, lower by Rs 18.2/mmbtu (3.7%).
Tuesday, July 15, 2008
Bush lifts ban on oil drilling
resident Bush lifted an executive ban on offshore oil drilling and challenged Congress to follow suit, aiming to turn the enormous public frustration about gasoline prices into political leverage. Democratic lawmakers rejected Bush's plan as a symbolic stunt.
With gas prices topping USD 4.10 a gallon nationally, Bush made his most assertive move to extend oil exploration, an energy priority of his presidency. By lifting the executive prohibition against coastal drilling, Bush rescinded a White House policy that his own father put in place in 1990.
The move will have no practical effect unless Congress acts, too. Both executive and legislative bans must be lifted before offshore exploration can happen.
Bush had called on Congress a month ago to go first, then reversed himself on Monday. He said the country could no longer afford to wait.
"Failure to act is unacceptable. It's unacceptable to me and it's unacceptable to the American people," Bush said in an event held in the Rose Garden.
"Democratic leaders can show that they have finally heard the frustrations of the American people by matching the action I've taken today, repealing the congressional ban, and passing legislation to facilitate responsible offshore exploration," Bush said.
BSE Bulk Deals to Watch - July 15 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
15/7/2008 531190 A V COTTEX I PEGASUS STOCKS AND SHARES PVT. LTD. B 160000 15.25
15/7/2008 531190 A V COTTEX I SUDISH KUMAR S 86600 15.25
15/7/2008 531190 A V COTTEX I SUDHIR JAIN S 51101 16.06
15/7/2008 531190 A V COTTEX I BEEJAY INVESTMENTS AND FINANCIAL CONSULTANTS P LTD S 38650 15.80
15/7/2008 520077 AMTEK AUTO L WARHOL LIMITED B 1000000 220.00
15/7/2008 520077 AMTEK AUTO L CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 983672 220.00
15/7/2008 532996 FIRST WIN SEAHEAVEN INVESTMENT MAURITIUS LIMITED S 115000 101.41
15/7/2008 532985 KOTAK SENSEX EDELWEISS SECURITIES LIMITED S 18102 129.82
15/7/2008 505299 KULK POW TOO RAJIV ARORA B 51204 74.10
15/7/2008 505299 KULK POW TOO RAJIV ARORA S 51204 73.98
15/7/2008 511728 KZLEASING YOESH G. PANDYA S 47000 7.65
15/7/2008 500337 PRIME SECU L KANUMANEK TRADING COMPANY L B 140000 37.25
15/7/2008 500337 PRIME SECU L LAADKI TRADING AND INV. LTD. S 140000 37.25
15/7/2008 517214 SPICE MOBIL YUVAK SHARE TRADING PVT.LTD. B 264553 29.92
15/7/2008 517214 SPICE MOBIL YUVAK SHARE TRADING PVT.LTD. S 264553 30.00
15/7/2008 532375 TIPS INDUSTR P. R. TRADERS B 100000 47.75
15/7/2008 532375 TIPS INDUSTR P R AND COMPNAY S 100000 47.75
15/7/2008 532765 USHER AGRO MAYANKKUMAR RAMESHCHANDRA BHAT B 109384 108.02
15/7/2008 531950 VERTEX SECUR AMI STOCK SHARE BROKERS PLTD B 50000 32.00
NSE Bulk Deals to Watch - July 15 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
15-JUL-2008,AMTEKINDIA,Amtek India Limited,WARHOL LIMITED,BUY,3500000,84.00,-
15-JUL-2008,ANGAUTO,ANG Auto Limited,FIDELITY FUNDS - EMERGING MARKETS FUND,BUY,1056458,74.50,-
15-JUL-2008,EDUCOMP,Educomp Solutions Limited,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,BUY,90000,2732.66,-
15-JUL-2008,FIRSTWIN,First Winner Industries L,DIPAK RAMANBHAI RATHOD,BUY,155099,93.20,-
15-JUL-2008,FIRSTWIN,First Winner Industries L,SPS CAPITAL & MONEY MANAGEMENTSERVICES PVT.LTD.,BUY,100000,92.24,-
15-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,BALASO VITTHAL SHINDE,BUY,289816,38.14,-
15-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,KHATRI ENTERPRISE,BUY,286637,36.85,-
15-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,304430,135.96,-
15-JUL-2008,SASKEN,Sasken Commu Techno Ltd,QUEST PORTFOLIO SERVICES PRIVATE LIMITED,BUY,3,134.80,-
15-JUL-2008,AMTEKINDIA,Amtek India Limited,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,3500000,84.00,-
15-JUL-2008,ANGAUTO,ANG Auto Limited,FIDELITY FUNDS - EMERGING MARKETS FUND,SELL,1056458,74.50,-
15-JUL-2008,FIRSTWIN,First Winner Industries L,DIPAK RAMANBHAI RATHOD,SELL,179950,100.32,-
15-JUL-2008,FIRSTWIN,First Winner Industries L,SPS CAPITAL & MONEY MANAGEMENTSERVICES PVT.LTD.,SELL,100000,93.01,-
15-JUL-2008,KOHINOOR,Kohinoor Foods Limited,SANJEEV ARORA,SELL,150000,105.00,-
15-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,BALASO VITTHAL SHINDE,SELL,289816,36.87,-
15-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,CHIRAG Y. THAKKAR,SELL,116808,38.16,-
15-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,YASHWANTBHAI A. THAKKAR,SELL,200000,38.13,-
15-JUL-2008,PVR,PVR Limited,MATTHEWS INTERNATIONAL FUNDS,SELL,187769,170.00,-
15-JUL-2008,RANBAXY,Ranbaxy Laboratories Ltd,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,5138055,427.75,-
15-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,304430,135.76,-
15-JUL-2008,SASKEN,Sasken Commu Techno Ltd,QUEST PORTFOLIO SERVICES PRIVATE LIMITED,SELL,152604,136.51,-
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