India Equity Strategy - June 12 2009
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Friday, June 12, 2009
Market set for uncertain start
The key benchmark indices may open in green tracking gains in most of Asia. However volatility may be high as investors may remain cautious after recent surge in Indian stocks. The investors will take further cues from Industrial output data for the month of April 2009 due today. Industrial production showed a decline 2.3% in March 2009 as compared to a rise of 5.5% during March 2008.
Most of the Asian stocks rose today as improved economic indicators pointed to an easing of the U.S. recession and metal prices jumped the most in 10 days. Key benchmark indices in Hong Kong, South Korea, Japan, and Singapore rose by between 0.4% to 0.98%.
But,China's Shanghai Composite fell 0.35% even as China's industrial production rebounded in May 2009, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. Output rose 8.9 % in May 2009 over May 2008 the statistics bureau said today, after gaining 7.3 % in April 2009. Taiwan's Taiwan Weighted fell 0.65%.
The US markets closed flat yet again on Thursday, 11 June 2009, well off their earlier highs. Wall Street got an early boost from the pre-market economic reports, which showed jobless claims fell last week and retail sales ticked higher in May 2009. The Dow gained 31.90 points, or 0.4%, to 8,770.92. The S&P 500 added 5.74 points, or 0.6%, to 944.89. The Nasdaq Composite Index was up 9.29 points, or 0.5%, to 1,862.37
Some encouraging economic data lifted the sentiment on Wall Street yesterday initial claims for unemployment benefits fell by 24,000 last week to 601,000, a much sharper drop than expected. Retail sales also shot up 0.5% in May 2009, marking the first gain in three months, boosted by rising gasoline prices.
Closer home, Indian stocks have soared in the past three months on a view that ample global liquidity and a return of risk appetite will help India Inc help raise funds for expansion which in turn will boost corporate profits. India Inc has already raised almost Rs 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
Foreign funds are aggressively buying in Indian stocks. As per the provisional figures on NSE, foreign funds bought shares worth Rs 786.57 crore on Thursday, 11 June 2009. Foreign funds are aggressively buying in Indian stocks. FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
On the back of heavy buying by foreign funds, the Sensex jumped 5,819.50 points or 60.32% in calendar year 2009 as on 10 June 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 7,306.41 points or 89.53% on 10 June 2009.
Net inflows into domestic equity mutual funds rose to Rs 1,930 crore in May 2009, the highest in 14 months, and more than twice the amount in the first four months of 2009, according to data from the Association of Mutual Funds in India.
Meanwhile, the government reportedly is considering a proposal to restore the rate of service tax to its earlier level of 12%. The government had reduced the service tax rate to 10% in the third stimulus package which was unveiled in February 2009. This option of withdrawing the service tax cut is being weighed on account of spiralling government expenditure, a result of the government's attempts to boost the economy and shrinking revenues due to the slowdown in economic activity.
Finance minister Pranab Mukherjee on Thursday said there was a need to find ways to bring the economy back to higher growth path without increasing the fiscal deficit. He said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs.
Mukherjee had on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said. Mukherjee said banks have agreed to explore the possibility of reducing rates after a meeting with chiefs of state-run banks.
Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.
A change in the Reserve Bank of India's current loose monetary policy stance if and when it takes place may weigh on equities. Investors have been betting that falling interest rates in India may help sustain strong domestic demand and also support a larger capital expenditure programme of India Inc. Late last week, India's biggest private sector bank by net profit ICICI Bank cut prime lending rate by 50 basis points.
Rising metal prices is a cause of concerns for manufacturing companies as their raw material costs may shoot up.
The government's oil subsidy bill may remain high and it could continue to put pressure on the already high fiscal deficit if the government does not resort to decontrol of oil prices. However, the surging rupee against the dollar may mitigate the impact to some extent as India is a major importer of crude.
Petroleum Secretary R.S. Pandey on Wednesday said the government is committed to reforms in fuel pricing but it wants to ensure affordable fuel supply. Pandey's comments come in the backdrop of a newspaper report on Tuesday that the government may defer a proposal to decontrol pricing of gasoline and diesel because of the increase in crude oil prices. Trinamool Congress (TC), a key ally in Prime Minister Manmohan Singh's government, opposes lifting controls on fuel pricing. With her eye on a series of local elections coming up in West Bengal, she told a Bengali television channel on Monday that her party would protest against any move which would result in higher fuel prices.
The government fixes the price of petrol and diesel and compensates state refiners, such as Indian Oil Corporation, HPCL and BPCL by supplying domestic crude oil at a discount and by issuing bonds to shore up their balance sheets.
Any disappointment on reforms may weigh on the stock market at a time when many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will push economic reforms to boost growth.
The petroleum minister had recently said he will submit a proposal for deregulation of oil products to the Cabinet in six to eight weeks. If government removes price controls on petrol and diesel, it would benefit PSU OMCs and also the government, which has been issuing oil bonds to share PSU OMC's burden. It would also persuade private refiners, such as Reliance Industries and Essar Oil, to reenter the oil-marketing business.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present.
Unveiling the agenda of the government, President Pratibha Patil in her speech addressed to a joint session of both houses had last week indicated government's intension to divest stake in state-run firms. The government, however, intends to retain control over state-run firms and will continue to hold at least 51% stake. But some investors are concerned that the government's two key allies viz. the DMK and Trinamool Congress (TC) may oppose economic reforms.
Prime Minister Manmohan Singh on Tuesday said India will achieve an economic growth of at least 7% this fiscal and promised more resources for areas like infrastructure and public services. He said India will be able a growth rate of 8-9%, even when the world grows at a lower rate.
The Prime Minister said the reason behind his optimism was that India's savings rate, which determines the money that can be deployed for development projects, was still high at 35% of gross domestic product (GDP).
Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation. "It (expenditure towards infrastructure) will not add to inflation, but to our economic growth."
According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6% achieved during the past five years. He also said that his government was deeply committed to the agenda listed in the President's address, adding flagship programmes will be further strengthened and public delivery system made more transparent.
Daily News Roundup - June 12 2009
Reliance and Essar Oil are in talks with the Petroleum Ministry and Cairn Energy to lift a portion of Cairn’s Mangala crude in Rajasthan. (BL)
Sesa Goa has agreed to takeover the mining assets of Dempo Group for Rs17.5bn in an all cash deal. (BL)
Infosys is in discussion with five-six of its clients for acquiring their technology units. (BL)
ONGC to borrow Rs270bn in the next three-four years to fund projects. (ET)
Tech Mahindra may not hike open offer price for Satyam Computer from Rs58 per share. (ET)
NTPC-BHEL, plan to jointly set up a Rs60bn power equipment manufacturing unit in Andhra Pradesh, has been allocated 750 acres of land for the greenfield project. (BL)
Hindustan Unilever has decided to enter into the kitchen cleaning surface market by bringing its international brand, Cif. (BL)
Reliance Power to raise Rs120bn debt for its 4,000MW ultra mega power project at Krishnapatnam in Andhra Pradesh. (ET)
Maruti Suzuki will manufacture Nissan Pixo at its Manesar plant. (BL)
Orissa Government has pruned Vedanta Aluminium’s plans to expand its smelter and refining capacity due to lack of bauxite linkages and environmental issues. (BL)
L&T sold its 14.3mn shares in Ultratech, 11.5% stake in the company, thus registering a profit on sale of shares of Rs10.4bn. (BL)
TCS is competing for 5-6 BPO deals worth US$150-200mn. (ET)
Jet Airways is negotiating with Boeing to cancel its order for B777 jet, worth Rs7.3bn. (BS)
Satyam has launched a cost cutting plan which is expected to save Rs10mn a day. (ET)
Maruti to launch A-Star into Africa and Latin America markets. (ET)
SAIL to cut its Rs780bn expansion plans by 13% to save Rs100bn. (ET)
Novartis India has successful closed its open offer to buy shares in Indian arm and rejects suggestion of de-listing. (ET)
Real-estate private equity firm Red- Fort Capital has acquired 18% stake in Parsvnath Developers premium residential project in New Delhi. (ET)
Tata Tea is scouting to acquire global brands in Russia, South America and Asia Pacific region. (FE)
Tech Mahindra will make a preferential issue to raise its holding in Satyam Computers if its open offer flounders. (FE)
Pantaloon Retail’s same store sales grew to the highest in May as consumer demand improved. (BS)
Following a drop in orders Suzlon has decided to cut 160 jobs, more than half of its workforce, at its US plant. (BL)
Jubilant Organosys subsidiary Jubilant Biosys has entered into 3- year collaboration with US based pharmaceutical firm Endo Pharmaceuticals for research in oncology. (BL)
Tata Tea has initiated a strategic reorganization plan of its beverages business. (BL)
ADAG to repay Rs40bn of debt which was backed by shares of its 3 group companies. (BS)
Shiv Vani Oil plans to raise Rs6bn from domestic and international markets. (BL)
GM India beings trial production of new mini car, to be launched later this year. (BL)
Inflation for the week ended May’ 30 dropped to 0.13% as against 0.48% in the previous week. (ET)
Finance Minister is not keen to do away with STT as of now. (ET)
DoT open to hiking reserve price for 3G spectrum to Rs35.4bn. (ET)
World Health Organization has declared first flu pandemic of 21st century. (ET)
PM economic advisory council expects 7% GDP growth in the FY10. (ET)
BJP ruled states are against the introduction of Goods and Services Tax (GST) from April 1, 2010. (ET)
Retail fuel price differential between PSU’s and private players is expected to rise to Rs2-2.5/litre from Rs1-1.5/litre currently. (BL)
IIP…Index of Improved Performance!
No great improvements in the lot of mankind are possible until a great change takes place in the fundamental constitution of their modes of thought.
Investors seem happy with the small changes in economy and great changes in the market. After Thursday’s pullback, bulls are all set to rule again. We expect the Indian market to open higher and stay firm. IIP data for April will be out today. Expectations are of continued improvement. Besides, March’s dismal figure (-2.3%) may also be revised upwards. What’s more, inflows from both, foreign and local funds have been pretty strong despite a choppy week.
Global cues are encouraging, barring the surge in oil prices. Key global markets in the US and Asia have hit multi-month highs. Stocks in Europe ended up for a third successive day. The advance is largely on belief that the worst of the global recession is history. Economic reports from across the globe show that the severity of economic slump is easing. Unless we are hit by any nasty surprises, the positive trend in equity markets is likely to hold, though the speed of the rise may slow a bit.
The immediate issues confronting this rally are: rising bond yields, spike in commodity prices, a possible weak monsoon, budget disappointments, policy delays and corporate earnings missing estimates. Meanwhile, the WHO has declared swine flu a global pandemic.
Watch out for Sesa Goa as the iron ore exporter has bought mining assets of the Dempo group for Rs17.5bn.
Gail India and Indian Hotels will announce their results today.
FIIs were net buyers in the cash segment on Thursday at Rs7.86bn while the local institutions pumped in Rs5.58bn. In the F&O segment, the foreign funds were net sellers at Rs7.98bn. On Wednesday, FIIs were net buyers at Rs7.17bn in the cash segment. Mutual funds were net buyers at Rs9.49bn on the same day.
US stocks ended modestly higher on Thursday, with all three major benchmarks closing at multi-month highs, spurred by the day's positive economic reports. The Standard & Poor’s 500 Index ended at a seven-month high.
The Dow Jones Industrial Average gained nearly 32 points, or 0.4%, to 8,770.92. Despite falling short of its 2008 finish, the index ended at its highest level since Jan. 6. The S&P 500 index added over 5 points, or 0.6% to 944.89, its highest close since Nov. 5.
The Nasdaq Composite index climbed 9 points, or 0.5%, to 1,853.40, ending at its best point since Oct. 6.
US stocks have been on the rise since bottoming March 9, with the Dow up 34%, the S&P 500 up 40% and the Nasdaq up 47%, as of Thursday's close. But they have fluctuated this week as rising Treasury yields and higher commodity prices sparked worries about inflation hampering the economic recovery.
A rise in retail sales and a bigger-than-expected dip in jobless claims raised hopes that the pace of the recession is slowing. But the early advance lost momentum; the S&P 500 failed to hold on after briefly hitting a key level that traders and other market pros watch.
A comparatively strong 30-year bond auction helped temper worries about pricing pressures, at least in the short term. Treasury prices jumped, lowering the corresponding yields. The benchmark 10-year note yield fell to 3.85%, down from 4% early Thursday morning. The yield touched 4% during Wednesday's session for the first time since last October.
Retail sales climbed 0.5% in May, the Commerce Department reported. The report was in line with forecasts and showed an improvement from April, when sales fell a revised 0.2%.
Sales excluding autos rose a bigger-than-expected 0.5%. Economists had forecast that sales without volatile autos would rise 0.2% after falling a revised 0.2% in April. But the report mostly reflects the recent rise in gas prices, rather than any new direction for the consumer.
A Federal Reserve report showed Americans saw $1.3 trillion in wealth disappear in the first quarter of this year, as home values declined and the stock market tanked. But the rate of decline was slower than last year. In the fourth quarter alone, $5.1 trillion in wealth disappeared, the biggest quarterly plunge since the Fed started tracking data in 1951.
Another report showed that foreclosure filings fell 6% in May from April, but still saw the third-worst month on record. The report showed that one of every 398 households received some kind of filing in the month, including notices of default, scheduled auctions or bank repossession.
The number of Americans filing new claims for unemployment fell 24,000 to 601,000 last week, according to a Labor Department report released Thursday morning. Economists though claims would dip to 615,000. However, continuing claims, the number of Americans who have been receiving benefits for a week or more, rose to 6,816,000 from a revised 6,757,000 in the previous week.
Bank of America CEO Ken Lewis stressed that pressure from the government played a key role in the company's decision to complete its purchase of Merrill Lynch last year. He said the federal government threatened to remove management or board members if the company went back on its promise to buy Merrill, even though Merrill's financial state was deteriorating.
In currency trading, the dollar fell versus the euro and the yen.
US light crude oil for July delivery rose $1.35 to settle at $72.68 a barrel on the New York Mercantile Exchange, the highest close since October.
COMEX gold for August delivery rose $7.30 to settle at $962 an ounce.
European shares rose, owing to strength in drugmakers and banks. The pan-European Dow Jones Stoxx 600 index advanced 1% to close at 214.80, up for a third straight session.
Germany's DAX 30 index climbed 1.1% to 5,107.26, while the French CAC-40 index rose 0.6% to finish at 3,334.94 and the UK's FTSE 100 index was up 0.6% to end at 4,461.87.
Indian markets ended with marginal losses on Thursday ending a two day 5% rally. Weak cues from the US coupled with mixed cues from the Asian markets prompted the traders and investors to book some profits at higher levels. Inflation numbers which fell to 30-year low had a minimal impact on sentiment. India’s Inflation fell to 0.13% for the week ended May 30 as against 0.48% in the previous week.
The Sensex slipped 55 points or 0.36% to end at 15,411 after touching a high of 15,517 and a low of 15,240. The index had opened at 15,517 against the previous close of 15,466. The NSE Nifty slipped 18 points or 0.4% to shut shop at 4,637.
Shares of UltraTech Cement declined by over 4% to Rs735 after Larsen & Toubro Limited sold its complete stake of 11.49% in the company in the open market.
The sale was carried out at an average price of around Rs725 per share. L&T had exited its cement business through a demerger and sale to Grasim in 2004, and had retained 11.49% stake in Ultratech with a commitment to sell the stake on or before 31st Dec,
2009
The sale of its complete stake in Ultratech Cement Limited is in accordance with L&T’s obligations under its agreement with Grasim, and is also in line with L&T’s strategy of focusing on its core business. In its efforts to get the best value for its shareholders, the company decided that the present market conditions were correct for disinvestment of its stake.
Shares of L&T also ended lower by 0.5% to Rs1624 after hitting an intra-day low of Rs1669 and Rs1586 recording volumes of over 0.9mn shares on BSE.
Shares of Mahindra & Mahindra Financial advanced by 2.5% to Rs285 after ~6.81mn shares or 7% of its equity changed hands in three transactions. The scrip touched an intra-day high of Rs293 and a low of Rs263 and recorded volumes of over 7mn shares on NSE.
Shares of EKC gained by over 5% to Rs226 after ~4.7% equity shares of the company changed hands in a single transaction. The scrip touched an intra-day high of Rs234 and a low of Rs209 and recorded volumes of over 0.8mn shares on BSE.
Shares of GTL Infrastructure gained 1.6% to Rs46 after the Board of directors of the company would meet on June 11, 2009, to consider allotment of equity shares consequent to Conversion Notice(s) received for conversion of FCCBs at a conversion price of Rs53.04 per share. The scrip touched an intra-day high of Rs47.4 and a low of Rs44 and recorded volumes of over 4.6mn shares on BSE.
Shares of Shiv Vani Oil advanced by 2.7% to Rs318 after the board of directors of the company approved to raise funds through issue of equity shares / GDRs / ADRs / FCCBs/ securities for an amount not exceeding Rs6bn or its equivalent in any foreign currency, either through preferential issue and / or qualified institutional placement (QIP) and / or private placement or otherwise.
Shares of GMR Infra ended lower by 3% to Rs157. GMR Energy Ltd (GEL), the 100% subsidiary company along with other group company owns 33.34% of the issued and outstanding capital of Homeland Energy Group Ltd (HEG), Canada, listed on Toronto Stock Exchange.
HEG, Canada, through its subsidiaries has major interest in coal projects in South Africa including an operating mine and also other investment in uranium exploration Company etc. GEL has nominated three directors, Mr. B V Nageswara Rao, Mr. Raaj Kumar and Mr. Ashis Basu on the Board of HEG, representing 50% of the Board."
Shares of DS Kulkarni slipped by 3.2% to Rs55.9 after the company announced that it has terminated an agreement with GTC Cyprus Holding. GTC agreement was for joint venture development of SEZ said the company. The scrip touched an intra-day high of Rs60 and a low of Rs55 and recorded volumes of over 0.15mn shares on BSE.
Looking at the choppy trades on Thursday, markets would continue to struggle for direction in the coming days. The 4,650 levels for Nifty would continue to be crucial, a break out above or below the vital mark on either side would be the trend decider. Market players would also be awaiting the release of the industrial production numbers to be released on Friday noon. The consensus forecast is for a flat IIP as against a drop of 2.3% in March.
Market may open positive
Yesterday's pullback and firm economy outlook may help the market advance further. Asian indices coupled with US indices are displaying a subdued trend in the ongoing trades and may exert some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 4600 and a break below this level could see it slip further to 4550-4500, while on the upside the index could test higher level at 4700. The Sensex has a likely support at 15300 and may face resistance at 15600.
Major US indices Stocks cut losses, but still ended lower Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort. While the Dow Jones moved down by 24 points at 8739, the Nasdaq moved down by 7 points to close at 1853.
Most of the Indian ADRs traded firm on the US bourses. Satyam led the pack with gains of 35.71% while HDFC Bank, Dr Reddy, Tata Motors, ICICI Bank and Patni Computers jumped over 0.09-4% each. Among the laggards Rediff lost 6.67%, Wipro, Infosys, MTNL and VSNL lost marginally.
Crude oil prices raised, with the Nymex light crude oil for July delivery falling by $1.32 to close at $71.33 a barrel. In the commodity space, the Comex gold for August delivery reamined unchanged at $954.70 an ounce.
Crude shoots up
Prices rise as International Energy Agency increases the 2009 global demand forecast
Oil prices ended substantially higher on Thursday, 11 June, 2009. Price rose today after International Energy Agency increased the 2009 global demand forecast for oil for the first time in ten months. Prices also rose today after energy department reported sudden draw in crude inventories for last week yesterday.
On Thursday, crude-oil futures for light sweet crude for July delivery closed at $72.68/barrel (higher by $1.35 or 1.9%). Last week, crude ended higher by 3.2%.
Crude ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 50% since then. Year to date, in 2009, crude prices are higher by 43.9%.
In a monthly report released on Thursday, the IEA, an energy advisor to 28 developed countries, increased its global oil demand estimate for this year by 120,000 barrels a day to 83.3 million barrels a day.
Yesterday, the EIA had reported that crude inventories fell by 4.4 million barrels in the week ended 5 June, 2009. Refineries operated at 85.9% of their operable capacity last week, slightly lower than a week ago. EIA also reported that crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year. Meanwhile, gasoline inventories fell 1.6 million barrels, and distillate stockpiles declined 300,000 barrels.
Earlier this week, the Energy Information Administration raised its outlook for this year's crude-oil and gasoline prices. The body said that crude prices are expected to average $58.70 a barrel this year. That's up from the $52 a barrel the EIA had forecast a month ago. It also raised the outlook for next year's crude price to $67.42 from $58. The EIA also said regular gasoline prices are expected to average close to $2.70 a gallon in July. The average regular gasoline price averaged across the full year is expected to be $2.33 a gallon.
Also at the Nymex on Thursday, July reformulated gasoline rose 4.96 cents, or 2.5%, to $2.0649 a gallon and July heating oil gained 2.08 cents, or 1.1%, to $1.8534 a gallon.
July natural gas rallied 22.5 cents, or 6.1%, to $3.933 per million British thermal units. It rallied to $4.067 earlier. EIA reported today that U.S. inventories rose 106 billion cubic feet in the week ended 5 June, 2009. At 2,443 billion cubic feet, stocks were 568 billion cubic feet higher than last year at this time and 438 billion cubic feet above the five-year average.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed at Rs 3,456/barrel, higher by Rs 88 (2.6%) against previous day's close. Natural gas for June delivery closed at Rs 187.8/mmbtu, higher by Rs 11.7/mmbtu (6.6%).
Precious metals end higher
Drop in dollar imparts shine on them
Precious metal prices shot up on Thursday, 11 June, 2009. They gave up earlier losses as the dollar lost sheen and dropped increasing their appeal as a hedge against inflation.
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.
On Thursday, Comex Gold for June delivery ended at $962, higher by $7.3 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10.8%.
Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.
On Thursday, Comex silver futures for July delivery rose 26 cents (1.7%) at $15.49 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 37.7% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar reversed its earlier gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down 1.2%.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for August delivery closed higher by Rs 70 (0.5%) at Rs 14,665 per 10 grams. Prices rose to a high of Rs 14,694 per 10 grams and fell to a low of Rs 14,525 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 373 (1.6%) higher at Rs 23,948/Kg. Prices opened at Rs 23,650/kg and rose to a high of Rs 24,018/Kg during the day's trading.
FIIs continue buying
Inflow of Rs 717.70 crore on 10 June 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 717.70 crore on Wednesday, 10 June 2009, lower than Rs 990.70 crore on Tuesday, 9 June 2009.
FII inflow of Rs 717.70 crore on 10 June 2009 was a result of gross purchases Rs 3851.50 crore and gross sales Rs 3133.80 crore. The BSE Sensex surged 339.81 points, or 2.25%, to 15,466.81 on that day.
FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
There are a total of 1660 foreign funds registered with the Securities & Exchange Board of India (Sebi).
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