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Friday, August 28, 2009
Crude pares earlier losses
Price rises as the dollar weakens
Crude prices erased earlier losses and ended higher for the day on Thursday, 27 August, 2009. Prices crawled up today following weakness from the US dollar.
On Thursday, crude-oil futures for light sweet crude for October delivery closed at $72.49/barrel (higher by $1.06 or 1.5%). During intra day trading, crude fell to a low of $69.83/barrel. Last week, crude ended higher by 6.1%.
For the month of July, 2009, crude ended lower by a marginal 0.6%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 53% since then. Year to date, in 2009, crude prices are higher by 48.5%.
In the currency market on Thursday, the dollar index which weighs the value of dollar against a basket of six other currencies fell by 0.2%.
The preliminary second quarter GDP reading showed that the U.S. economy contracted at an annualized rate of 1%, unrevised from the advance reading and better than expected. Consumer spending was revised modestly higher to show a 1.0% decline, which was also a bit better than expected.
EIA had reported yesterday that U.S. crude inventories rose 200,000 barrels in the week ended 21 August, as imports jumped 14% from the prior week. In the weekly report, the EIA also reported gasoline stockpiles fell 1.7 million barrels last week while distillate fuels, which include diesel and heating oil, rose 800,000 barrels.
The report also detailed that total gasoline supplied, an implied gauge of demand for the fuel, fell 1.1% from a week ago to 9.1 million barrels a day. But total petroleum products supplied rose slightly, to 19.5 million barrels a day, as small increases in jet fuel and residual oil demand offset the decline in gasoline.
Also at the Nymex on Thursday, September reformulated gasoline rose 4.88 cents, or 2.5%, to end at $2.0314 a gallon. September heating oil gained marginally to end at $1.8592 a gallon after finishing at $1.8520 on Wednesday.
Natural gas for September delivery dropped 6.70 cents to end at $2.843 per million British thermal units on the Nymex. EIA reported today that gas in storage rose by 54 billion cubic feet to stand at 3,258 Bcf during the week ended 21 August, 2009.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for September delivery closed higher by Rs 12 (0.34%) at Rs 3,504/barrel. Natural gas for September delivery closed lower by Rs 5.1 (3.2%) at Rs 155.1/mmbtu.
Precious metals register mixed end
Gold shines but silver drops little
Precious metal prices ended mixed on Thursday, 27 August, 2009. Gold prices rose today as the dollar slipped. But silver prices fell marginally.
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, gold for December delivery ended at $947.4, higher by $1.6 (0.2%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by almost 0.6%. Year to date, gold prices are higher by 6.8%.
Gold ended July, 2009 higher by 2.8%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had 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 (8.5%) since then.
On Thursday, Comex silver futures for September delivery fell by 3 cents (0.2%) to $14.22 an ounce. Last week, silver ended lower by 3.9%.
Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 27.8% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar index which weighs the value of dollar against a basket of six other currencies fell by 0.2%.
The preliminary second quarter GDP reading showed that the U.S. economy contracted at an annualized rate of 1%, unrevised from the advance reading and better than expected. Consumer spending was revised modestly higher to show a 1.0% decline, which was also a bit better than expected.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for October delivery closed higher by Rs 6 (0.03%) at Rs 15,027 per 10 grams. Prices rose to a high of Rs 15,064 per 10 grams and fell to a low of Rs 14,980 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 94 (0.4%) lower at Rs 23,296/Kg. Prices opened at Rs 23,352/kg and fell to a low of Rs 23,124/Kg during the day's trading.
FIIs step up buying
Inflow of Rs 1035.90 on 26 August 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 1035.90 crore on Wednesday, 26 August 2009, as against a meagre outflow of Rs 53.60 crore on Tuesday, 25 August 2009. e
FII inflow of Rs 1035.90 crore on 26 August 2009 was a results of gross purchases Rs 2812.60 crore and gross sales Rs 1776.70 crore. The BSE Sensex rose 81.38 points or 0.52% to 15,769.85 on that day.
FII inflow in August 2009 totaled Rs 1,679.50 crore (till 26 August 2009). Foreign funds had bought equities worth Rs 11,625.20 crore in July 2009. FII inflow in calendar year 2009 totaled Rs 37,849.20 crore (till 26 August 2009).
There are a total of 1694 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Bombay Rayon Fashions
We recommend a buy in Bombay Rayon Fashions from a short-term perspective. It is apparent from the charts of the stock that it has been on medium-term up trend from July low of Rs 140. Moreover, the stock has been on an intermediate-term uptrend since March low of Rs 80. On August 27, the stock jumped up 7 per cent, accompanied with good volume penetrating key resistance at Rs 200. It is trading well above 21- and 50-day moving averages. The daily relative strength index ( RSI) has entered in to the bullish zone. Beside, both daily and weekly moving average convergence and divergence indicators are hovering in the positive territory. Our short-term outlook on the stock is bullish. We anticipate the stock’s uptrend to prolong until it knocks our price target of Rs 226 in the forthcoming trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 194.
via BL
TRADING STRATEGY FOR 28TH AUGUST 2009
(Based on technical by O P AGARWAL)
Markets end flat with cautious optimism
The market opened marginally lower yesterday on weak global cues but soon recovered and moved into positive territory on selective buying in frontline stocks. However, a fresh bout of selling at higher levels thereafter pulled down the Sensex in the red again. The market appeared lackluster throughout the session with bouts of buying and selling intermittently. Investors appeared reluctant to build fresh positions instead pressed sales at higher levels in the absence of any new trigger. Market participants were engaged in shifting positions to new September derivative series whereby Nifty future rollover is estimated to be around 69-71%. Meantime, the commerce minister unveiled the five-year foreign policy, setting a target of US$ 200 billion worth exports for next fiscal. Under the policy the government extended tax holiday and duty refund for exporters, while allowing duty free capital goods import. Meantime, the Sensex after dipping to a low of 15685 in morning trades progressively moved up into the positive territory rising to 15,853 an hour past noon, but gave up most of its gains and closed with paltry gain of 11 points at 15,781. The Nifty closed the session flat with marginal gain of 7 points at 4688 making a low of 4645 and a high of 4707 in intra day trades. Pharmaceutical, capital goods and select IT shares remained firm throughout the session yesterday besides power, auto and oil stocks finding support at lower levels. The market will open today with new derivative series of September which is hoped to remain steady. However, readers are advised to watch the market trend before building large positions.
NIFTY FUTURE (Last close 4697.80)
The counter closed flat yesterday with the expiry of August derivative series. The market remained lackluster throughout the session yesterday with bouts of buying and selling at intervals. The counter opens today with new September derivative series which is hoped to remain steady. Chart patterns for NF appear positive but to keep up with the upward momentum the counter needs to remain and trade above 4717.75 whereby it may move further to 4737/4762. Strong support for NF exists at 4659.25 which if breached decisively NF may slide to 4642/4619.
RELIANCE CAPITAL FUTURE (Last close 841.20)
The company provides corporate advisory services like project finance, management of issues for raising capital and managing exposure to currencies and interest rates. It is also involved in custodian and depository activities, asset management, insurance, and real estate development. The company which holds 100% in Reliance Life Insurance is contemplating to come out with IPO once a policy decision is taken by the government. Meantime the stock of the company after moving range bound during the past three trading sessions closed yesterday flat with marginal gain with very high volume. The stock appears positive on charts and may move up to 858/873 once it trades and remains above 845.75. Strong support for the stock exists at 834.50.
ICSA INDIA FUTURE (Last close 186.80)
The company is engaged in providing software development services and technology solutions for the power, telecommunication and other sectors. The company also provides rural electrification, construction of sub-stations and conversion of LT line to HT lines. The company at its Board meet held on August 17, 2009, inter alia, has recommended declaration of Dividend @ 70% for the financial year 2008-2009, subject to the approval of Members at the ensuing AGM. The company has Rs 2,000 crore strong order book to be executed within next two years. The company earns over 90% of its revenues from public sector entities which comes from two streams — embedded solutions and infrastructure services. Meantime, the stock after remaining range bound during the past few trading sessions closed yesterday with high volumes gaining over 2%. The stock appears positive on charts and may move up to 193/197 once it trades and remains above 187.75. Strong support for the stock exists at 184.25.
Readers may avoid trading in the above recommended stocks unless, they have risk taking capacity.
Thursday, August 27, 2009
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