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Tuesday, July 22, 2008
Trading Calls - July 22 2008
Nifty (4160) Sup 4050 Res 4250
Buy Tech M (681)
SL 674 Tgt 694, 698
Buy Siemens (484)
SL 477 Tgt 494, 498
Buy HCC (86)
SL 82 Tgt 92, 94
Sell S Kumars (67)
SL 71 Tgt 61, 60
Sell Amtek Auto (214)
SL 219 Tgt 205, 203
Market may remain jittery
Victory goes to the player who makes the next-to-last mistake.
The Prime Minister was all smiles and flashed the "V" sign before moving the much-awaited confidence motion in the Lok Sabha. Fellow Congress leader and Foreign Minister Pranab Mukherjee went one step ahead, saying that the UPA had secured 276 votes. The confidence displayed by the two senior Congressmen rubbed off on the stock market, with the key indices gaining 1.5% each. A healthy trend in Asian markets and relatively stable oil prices forced the bears on the backfoot for the third successive day.
However, the broader market continued to buck the bullish trend. Market breadth was also negative. Also, institutions (both local and foreign) remained cautious ahead of the crucial trust vote.
In global markets, US stocks ended slightly lower after last week's rally. Oil prices have gained over $2 amid fears of disruption in the Gulf of Mexico from Tropical Storm Dolly. Lack of breakthrough in multilateral talks over Iran's nuclear program too pushed up prices. Markets in Europe rose while Asian markets are marginally down this morning. Japanese shares rose over 1% after yesterday's holiday.
Coming to today's outlook, the market could start off slightly lower. After that the trend is likely to be volatile and rangebound, as most players will stay cautious before the trust vote. The debate on the confidence motion will continue and the vote is unlikely before the close of trading. Uncertainty over the trust vote will keep most players nervous. So, it is difficult to predict a clear direction today. The market's reaction to the outcome of the trust vote will be known only tomorrow.
As for the much-talked about trust vote, it is still too close to call, as Indian politics is highly unpredictable. The UPA is banking on abstentions from the Opposition camp and a few defections as well. Its biggest threat is the emergence of the Third Front (Left-BSP-UNPA). Most political commentators and media expect the Government to survive the trial of strength by a small margin. The bulls will rejoice a UPA win, while a loss will lead to a knee-jerk fall. Once the dust settles, the focus will turn to the fundamentals, which remain fragile. Stay on the sidelines for the day due to the big event risk.
Key Results Today: Alfa Laval, Asian Paints, Bank of Rajasthan, Century Textiles, EMCO, Hanung Toys, IDBI Bank, Indraprastha Gas, Jindal Stainless, Lupin, NIIT Tech, NOCIL, Seamec, Sesa Goa, Siemens, Strides Arcolab, Tata Elxsi and Thermax.
FIIs were net sellers of Rs622.2mn (provisional) in the cash segment on Monday. The local institutions offloaded shares worth Rs2.31bn. In the F&O segment, the foreign funds were net buyers of Rs15.32bn. On Friday, FIIs were net buyers of Rs5.89bn in the cash segment. Mutual funds were net buyers of Rs1.3bn.
Asian markets were trading mixed. The Nikkei in Tokyo rallied 1.3% to 12,969 while the Hang Seng in Hong Kong was nearly unchanged at 22,531. The Kospi in Seoul was down 0.3% at 1557 while the Straits Times in Singapore dropped 0.7% at 2899. The Taiex in Taiwan lost 0.2% at 7074 and the Shanghai Composite in China shed 0.5% to 2847.
US stocks fell on Monday after oil prices rebounded, and investors turned cautious again on the financial sector. Sentiment was also affected by after pharma giants - Merck & Co. and Schering Plough - postponed reporting their quarterly results. Norwegian researchers said a study found a cholesterol drug marketed by the two companies to be ineffective in curtailing a cardiac condition.
The S&P 500 index closed nearly flat at 1,260. The Dow Jones Industrial Average dropped 29.23 points, or 0.3%, to 11,467.34, and the Nasdaq Composite Index lost 3 points, or 0.1%, to 2,279.53.
Market breadth remained positive. Seven stocks advanced for every five that fell on the New York Stock Exchange (NYSE), as all 39 energy companies in the S&P 500 advanced.
Oil prices rebounded strongly, following the largest four-day slide in trading history. Investors focused on a breakdown of negotiations with Iran, as well as Tropical Storm Dolly, which is making its way into the Gulf of Mexico. Light, sweet crude oil for August delivery settled up $2.16 to $131.04 a barrel.
Regular unleaded gas fell to $4.069 a gallon, down from $4.077 the previous day.
Yahoo announced a settlement with activist investor Carl Icahn over its lineup of candidates for board. Yahoo said the board is being expanded to 11 members, one of whom will be Icahn, along with two other added positions from Icahn's proposed slate of nine candidates. Shares of Yahoo slipped by more than 3%. Yahoo was scheduled to report its earnings Tuesday.
After the bell, Apple reported its third-quarter profit jumped 31%, beating Wall Street's expectations. The technology giant earned $1.07bn, or $1.19 per share, 11 cents ahead of Wall Street's expectations. Shares of Apple ended the trading day up 0.6%, but guidance for the coming quarter hit the stock in after-hours trading, pushing the stock down about 4.5%.
After the close, Merck announced that its second-quarter profit beat analyst expectations. Several charges drove second-quarter profit for Schering-Plough down, but adjusted profit results for the quarter topped Wall Street expectations.
Bank of America reported better-than-expected earnings, even as it revealed that its profit plunged 41% in the most recent quarter. After the bell, American Express reported profits that missed expectations badly, citing an economic environment that "has weakened significantly.
In currency trading, the dollar lost ground against both the euro and the yen. In the bond market, Treasury prices mostly increased, and the yield of the 10-year benchmark fell to 4.06%, from 4.08% late on Friday. COMEX gold for August delivery settled $5.70 higher at $963.70 an ounce.
Europe stocks advanced, led by banks. The pan-European Dow Jones Stoxx 600 index rose 0.6% to 282.36 after Bank of America topped earnings estimates. UK's FTSE 100 gained 0.5% to 5,404.30, while Germany's DAX 30 added 0.7% to 6,424.84, and the French CAC 40 was up 0.6% at 4,327.14.
Volatile markets ended with smart gains extending winning streak to third straight trading session. Firm global cues coupled with declining crude oil prices lifted the Indian bourses to open with a positive gap. Thereon key indices turned volatile and witnessed alternate bouts of buying and selling.
However, bulls gained momentum ahead of the trust vote on back of short covering. Finally the Sensex gained 214 points to close at 13,850 and the Nifty surged 67 points to close at 4,159.
Among the 30-scrips of Sensex, RIL, ICICI Bank, HDFC Bank and SBI were among the major gainers. However, the laggards were Satyam and L&T.
In the overall market, 1,163 stocks advanced and 1,368 stocks declined. Whereas, 84 stocks were unchanged.
Volume Toppers…
IDFC was among the most traded counter on the bourses. Others like, RNRL, RPL, JP Associates, Chambal Fertilizer, Satyam, Idea, Renuka Sugar, RPower and ICICI Bank were among the stocks in demand in the liquid universe.
Shares of IDFC declined by over 14% to Rs93.4 after the company may need about US$250mn in equity capital, Morgan Stanley analysts said. A central bank requirement for finance firms to increase capital to 15% of assets, from 10%, will force IDFC to sell stock, the US brokerage added.
Rating companies have asked IDFC to maintain its leverage ratio at five times its capital if it wants to keep its triple A credit rating, Morgan Stanley said. IDFC has reported a 20% increase in net profit to Rs2.17bn in the three months ended June 30, from Rs1.81bn a year earlier.
IDFC’s need to raise Tier-I capital in the current year, together with lower earnings growth estimates will cap near-term upside on the stock price, says another broking firm. The scrip touched an intra-day high of Rs112 and a low of Rs92 and recorded volumes of over 1,00,00,000 shares on NSE.
SCI ended flat at Rs207. The board of directors of the company at its meeting held on May 20, 2008 considered the proposal to issue 1 bonus share for every 2 equity shares held and decided to recommend the proposal to the administrative Ministry i.e. Ministry of Shipping, Road Transport & Highways for their approval in terms of the Articles of Association of the Company.
Further the company has said that, the Ministry of Shipping, Road Transport & Highways (MoSRTH) approved the proposal for issuance of 1 bonus equity share having nominal value of Rs10/ each for every 2 equity share held by the shareholders. Therefore, the Board may discuss the proposal at its meeting to be held on July 26, 2008. The scrip touched an intra-day high of Rs216 and a low of Rs203 and recorded volumes of over 1,00,000 shares on BSE.
3i Infotech gained by 1.6% to Rs95 after the company announced that it signed an agreement with Bank of India, to implement AMLOCK(TM), the company's award winning Anti Money Laundering (AML) software.
As part of this agreement, the company would undertake complete system integration, from procurement and installation of hardware including Storage, Database, Middleware, and Report Writer. The scrip touched an intra-day high of Rs99 and a low of Rs92 and recorded volumes of over 8,00,000 shares on NSE.
Dr Reddys Labs advanced by 2% to Rs675 after the company posted a net profit attributable to the shareholders of the parent of Rs919.70mn for the quarter ended June 30, 2008 as compared to Rs1872.30mn for the quarter ended June 30, 2007.
Total Income increased from Rs12624.90mn for the quarter ended June 30, 2007 to Rs15476.10mn for the quarter ended June 30, 2008. The scrip touched an intra-day high of Rs695 and a low of Rs650 and recorded volumes of over 3,00,000 shares on NSE.
SAIL gained by 3% to Rs125 after the company posted a net profit of Rs18.351bn for the quarter ended June 30, 2008 as compared to Rs15.251bn for the quarter ended June 30, 2007. Total Income increased from Rs83.464bn for the quarter ended June 30, 2007 to Rs114.219bn for the quarter ended June 30, 2008.
The scrip touched an intra-day high of Rs128 and a low of Rs121 and recorded volumes of over 50,00,000 shares on NSE.
Kohinoor Foods surged by over 4.5% to Rs107 after the company announced that it is planning to put up own spices manufacturing unit,synergic to its operational Indian food domain. The company is eyeing the chilled foods business and intends to augment its current manufacturing facility by bringing in chilled foods processing capabilities.
KFL's overseas arms in the US and UK - aiming to garner leadership status in their respective countries in the Indian foods business; in UK, Kohinoor has become 4th most popular Indian food brand. The scrip touched an intra-day high of Rs117 and a low of Rs100 and recorded volumes of over 10,00,000 shares on NSE.
Tata Motors is set to roll out pilot batch of 25 Nanos by September 15, 2008. (ET)
Reliance Communications has launched blackberry smartphone in the Indian market. (ET)
ONGC Videsh Ltd, subsidiary of ONGC is gearing to bid for blocks in Eucador jointly with Petro Eucador. (ET)
Tech Mahindra bags US$700mn order from BT for transformation of its IT systems. (ET)
Cipla India may launch copycat version of 20 patented drugs of leading global drug makers.
GVK Power is in talks with three PE players to offload 25% stake in its power business. (Mint)
Idea Cellular offers to surrender two licenses to gain DoT nod for its proposed merger with Spice Communications. (Mint)
Tata Group and Reliance Industries have applied for allocation of captive coal blocks for converting coal into liqui8d fuels. (DNA)
Omaxe Ltd to raise funds for its ambitious affordable housing project from PE players. (DNA)
BSNL defers opening of US$6bn GSM tender to August 30 from July 16. (DNA)
Tata Power to pick up 26% stake in Government of Bhutan promoted 114MW Hydro electric power projects. (BS)
Satyam Computer Services plans to set up IT and BPO development centres in Mexico and Chile. (BS)
Reliance Communications total subscriber base has touched the 50mn mark. (BS)
Bombay High Court will hear the KG Basin gas dispute between Reliance Industries and RNRL today. (ET)
Canara Bank plans to launch a Rs5bn venture capital fund. (BS)
Air India plans to cut tariffs on international routes. (ET)
LIC Housing Finance plans to enter venture funding and plans to start a Rs5bn real estate fund by the end of current fiscal. (BS)
Voltas to raise prices of air conditioners to offset rising input costs. (BS)
Petronet LNG hopes to close a long-term LNG contract soon following its board’s in-principle nod. (BL)
IVRCL Infrastructure has bagged five orders worth Rs3.5bn. (ET)
Bank of Baroda plans to open 10 new overseas branches. (ET)
Max Group is looking to list three of its subsidiaries Max India, Max New York Life and Max Healthcare. (ET)
UCO Bank may raise Rs3.25bn through preference allotment of equity shares. (ET)
Dr Reddy to buy out stake of ICICI ventures and Citigroup Venture Capital for US$18mn in Perlecan. (ET)
Glenmark Pharmaceuticals may acquire a medium to large scale specialty pharmaceutical company in US. (BS)
Garware Offshore has taken delivery of its eighth vessel “MV Poorna”, a AHTSV at Singapore. (FE)
Bilcare along with US company MeadWestaco Corporation has acquired International Labs, an American pharmaceutical packaging firm. (BS)
Global Vectra plans to start helicopter shuttle services in Mumbai, Bangalore and Kolkata. (ET)
Elder Pharmaceuticals has signed an agreement with California based Cymbiotics to market the latter’s six patented drugs in India. (ET)
Max Healthcare set to add four more hospitals tp its network by 2010. (BL)
Max India restructures its JV with New York Life to allow the latter to acquire additional 24% stake at 10% discount to fair market price. (BL)
Kirloskar Pneumatic Co to set up roadrailer manufacturing plant at Nashik. (FE)
Precision Automation and Robotics India bagged a Chrysler deal to build the US car maker’s axle assembly plant. (FE)
Economic Front Page
TRAI has questioned all telecom operators with respect to high SMS tariffs. (ET)
TRAI has told DoT to hike entry fee for an all India telecom license, if it wants to impose a one time spectrum fee on all GSM operators who hold radio frequencies above 6.2MHz. (ET)
The government is planning to simplify procedure for warrants issue MNCs on auto FDI route by allowing them to bypass FIPB approval. (ET)
The finance ministry has decided to form a panel to suggest possible changes in the proposed Insurance bill. (ET)
National Housing Bank is planning to buy housing loans from banks and housing finance companies. (ET)
Government has decided to ban all companies from Dubai, China, Hong Kong and Pakistan from investing in port infrastructure projects in the country. (ET)
US Market posts slight losses
Indices register little losses after a couple of pharmaceutical companies come under scanner
US market registered little losses today, Monday, 21 July, 2008 after crude prices climbed up again and Banc of America announced a substantial drop in its profits but however topping Wall Street’s estimates. Two pharmaceutical companies postponing their earning report till market closes also took a bit of toll on the market sentiment. Seven out of ten sectors ended in the red today led by consumer discretionary. Energy sector was one of the top gainers.
After a modest climb, The Dow Jones industrial Average ended the day with a loss of 29.23 points at 11,467.34. The Nasdaq Composite Index, finished lower by 3.25 points at 2,279.53. S&P 500 finished lower by 0.68 points at 1,260.
Twenty-one out of thirty Dow stocks ended in the red today led by Merck and American Express.
On the economic front, June leading indicators fell 0.1%, which was in-line with expectations. The report had a limited impact on the stock market.
Bank of America reported a 43% drop in earnings per share to $0.72. However, the result easily topped Wall Street's forecast due to a lower-than-expected write-down of $1.2 billion. The stock closed higher by 4%.
Merck along with Schering-Plough delayed releasing their second-quarter earnings until after the market's close as Norwegian researchers said the study found a cholesterol drug, Vytorin, marketed by the two companies to be ineffective in curtailing a cardiac condition.
The healthcare sector recently took a sharp slip into negative ground after momentarily spiking upward into the green. The drop coincides with negative news related to two marquee names in the pharmaceutical industry.
Barring HDFC Bank, Rediff.com and Patni Computers, all other Indian ADRs ended in the red today. Rediff.com was the largest gainer with the ADR soaring more than 4%.
Crude oil prices rose for the first time in five sessions today. Price spurred up as a tropical storm, Dolly, entered the Gulf of Mexico, and Iran, the world's fourth-biggest producer, resisted demands to suspend nuclear research. Crude-oil futures for light sweet crude for August delivery closed at $131.04 /barrel (higher by $2.16/barrel or 1.7%) on the New York Mercantile Exchange. It was the first increase in five days.
A hurricane watch was issued for the Texas coastline from Brownsville to Port O'Connor at morning time today by the Miami-based hurricane center. Dolly moved over the Yucatan Peninsula earlier today. Petroleos Mexicanos, Mexico's state oil company, produces about 1.07 million barrels of oil a day in the Bay of Campeche, which is south of the projected track of the storm. The northern Gulf of Mexico accounts for about 25% of U.S. oil production.
Trading was relatively light, with volume on the New York Stock Exchange passing 1.2 billion, and advancing stocks outran those declining nearly 2 to 1. On the Nasdaq, more than 753 million shares traded, and advancers beat decliners 5 to 4.
For tomorrow, Wachovia Bank, UPS, United Health, Caterpillar and DuPont are some of the more widely-held companies scheduled to announce their latest quarterly results Tuesday morning. There is no market moving economic data due tomorrow. Treasury Secretary Henry Paulson is scheduled to speak about the U.S. economy and markets before the opening bell.
Today's Pick - Indian Bank
We recommend a buy in Indian Bank from a medium-term perspective. From the charts of Indian Bank we observe that it had been on an intermediate-term down trend from its February high of Rs 256 till it recorded its 52-week low of Rs 78 on July 16.
The area around Rs 78 is a key support level and the stock reversed direction from here.
This reversal was supported by positive divergence in the daily relative strength index (RSI) and the moving average convergence and divergence.
On July 21, the stock jumped up 13 per cent breaking through its intermediate-term down trendline as well as the 21-day moving average.
The stock has gained 25 per cent over the past two trading sessions with heavy volume support.
The daily RSI is rising in the neutral region towards the bullish zone and the weekly RSI has recovered from the oversold region.
We are bullish on the stock in the medium-term horizon. We expect the stock to move up until it hits our price target of Rs 124 in the medium-term.
Traders with medium-term perspective can buy the stock while maintaining stop-loss at Rs 89.
via BL
Property prices down
Housing Development Infrastructure on Monday said countries real estate sector is going to witness a 20-25 per cent price fall but the financial capital would be insulated and would see a 10-15 per cent correction.
"There is still supply constraint in Mumbai. Hence, the fall will be in the range of 10-15 per cent, if there is further reduction in demand. But, the remaining part of the country is like to see a 20-25 per cent correction," HDIL's Managing Director Sarang Wadhawan told reporters on the sidelines of the company's Annual General Meeting here.
Wadhawan said that since the industry is cyclic in nature, the current phase of demand recession may be there for two years and then the boom period starts to stay for another five years or vice versa.
The company recorded over 56 per cent rise in net profit for the quarter ended June 30 at Rs 317.93 crore as against Rs 202.68 crore in the corresponding quarter previous fiscal.
It would not be impacted much by the slowdown in realty sector as its operations is mainly confined into the Mumbai metropolitan area.
"The company is confident of executing all the projects on time and continues to register positive growth in the remaining part of the fiscal," Wadhawan said.
HDIL's turnover increased by 28.6 per cent during the first quarter of the current fiscal at Rs 570 crore over the same quarter last fiscal.
The company, he said, is likely to develop projects on 10-12 million square feet area in the city including the Mumbai Airport Slum Rehabilitation Project (MASRP) and is set to spread it wings to Hyderabad and Kochi.
Wadhawan said the first phase of the MASRP has already been kicked off and would be completed in the next one and a half year-two year time. The company has started construction on around 15 mn sq feet of area for rehabilitating around 20,000 families in the first phase.
HDIL also plans to set up a multi-product SEZ at Virar in Thane district.
"We have acquired 2,300 acre of land and are in the process of acquiring additional 200 acre. After that, we will approach to the Government for approval," Wadhwan said.
Bullion metals register gains
Higher crude price and weak dollar puts some shine back on precious metals
Higher crude prices led to higher bullion metal prices today, Monday, 21 July, 2008. Weakness in the US dollar also led to higher bullion metal prices today. Going economic concerns about the current health of the US economy had been increasing the metal’s demand as a safe asset against the rising inflation in recent times. Silver prices also rose for the day.
Comex Gold for August delivery rose $5.7 (0.6%) to close at $963.7 ounce on the New York Mercantile Exchange. It rose to a high of $966.5 during intra day trading. Last week, it ended marginally lower by $2.6. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
This year, gold prices have gained 15% till date against a 5.5% drop for the dollar against the euro. 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%.
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%.
Today, Comex silver futures for September delivery rose 23 cents (1.2%) to $18.43 an ounce. Silver has gained 25% in 2008 till date. For the second quarter, it gained a paltry 1.4%.
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.
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.
At the currency markets on Monday, the U.S. dollar slipped after getting some support earlier on better-than-expected results from Bank of America. The banking giant reported a 41% profit fall for the second quarter but still beat Wall Street earnings estimates. The dollar index, a measure of the greenback against a trade-weighted basket of currencies, was down 0.1% at 72.069.
In the crude market on Monday, crude futures rose for the first time in five sessions, rebounding from last week's biggest weekly losses. Prices rose after multilateral talks over Iran's controversial nuclear program didn't yield progress. Cruse also crept higher as Tropical Storm Dolly headed toward the western Gulf of Mexico. Crude for August delivery closed up $2.16 (1.7%) at $131.04 a barrel on the New York Mercantile Exchange.
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. Gold and oil has climbed 42% and 82% since the past one year.
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 95 (0.72%) at Rs 13,305 per 10 grams. Prices rose to a high of Rs 13,366 per 10 grams and fell to a low of Rs 13,227 per 10 grams during the day’s trading.
At the MCX, silver prices for September delivery closed Rs 266 (1.04%) higher at Rs 25,700/Kg. Prices opened at Rs 25,515/kg and rose to a high of Rs 25,826/Kg during the day’s trading.
Crude rises for first time in five sessions
Prices rise on Iran’s threats and as storm Dolly comes near the Gulf
Crude oil prices rose for the first time in five sessions today, Monday, 21 July, 2008. Price spurred up as a tropical storm, Dolly, entered the Gulf of Mexico, and Iran, the world's fourth-biggest producer, resisted demands to suspend nuclear research. Last week crude had coughed up almost $16.5 in four sessions. Prices had plunged once again on economic worries surrounding the US economy.
Crude-oil futures for light sweet crude for August delivery closed at $131.04 /barrel (higher by $2.16/barrel or 1.7%) on the New York Mercantile Exchange. It was the first increase in five days. Last week, prices coughed up $16.5 (11.2%). It's now 11% lower than the $147.27 record high hit last Thursday.
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 74% higher than a year ago. For the year, crude is up by 38.7% till date.
A hurricane watch was issued for the Texas coastline from Brownsville to Port O'Connor at morning time today by the Miami-based hurricane center. Dolly moved over the Yucatan Peninsula earlier today. Petroleos Mexicanos, Mexico's state oil company, produces about 1.07 million barrels of oil a day in the Bay of Campeche, which is south of the projected track of the storm. The northern Gulf of Mexico accounts for about 25% of U.S. oil production.
On the other hand, Iran snubbed Western efforts to get it to suspend nuclear enrichment at talks in Geneva on 19 July setting the stage for new sanctions if the Middle East's second-largest oil producer doesn't respond to an existing proposal within two weeks.
At the currency markets on Monday, the U.S. dollar slipped after getting some support earlier on better-than-expected results from Bank of America. The banking giant reported a 41% profit fall for the second quarter but still beat Wall Street earnings estimates. The dollar index, a measure of the greenback against a trade-weighted basket of currencies, was down 0.1% at 72.069.
In its monthly report issued last week, OPEC lowered 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.
Natural gas in New York declined amid an outlook supplies are ample at the height of the U.S. cooling season and the path of a storm in the Gulf of Mexico will miss production areas. Natural gas for August delivery fell 6 cents (0.6%) to settle at $10.51 per million British thermal units.
At the MCX, crude oil for July delivery closed at Rs 5,599/barrel, higher by Rs 67 (1.21%) against previous day’s close. Natural gas for July delivery closed at Rs 453.3/mmbtu, lower by Rs 3.6/mmbtu (0.8%).
RCom July 2008 futures at premium
Turnover drops
Nifty July 2008 futures were at 4164, at a premium of 4.50 points as compared to spot closing of 4159.50. NSE's futures & options (F&O) segment turnover was Rs 43,942.21 crore, which was lower than Rs 52,794.98 crore on Friday, 18 July 2008.
Reliance Communications (RCom) July 2008 futures were at premium at 450.10 compared to the spot closing of 446.50.
Reliance Petroleum July 2008 futures were near spot price at 154.75 compared to the spot closing of 154.40.
NTPC July 2008 futures were at discount at 179.55 compared to the spot closing of 181.50.
In the cash market, the S&P CNX Nifty gained 67.25 points or 1.64% at 4159.50.
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