| Company Name | Offer Price (Rs.) | Premium (Rs.) | Kostak (Rs. 1 Lac Application) |
| Man Infraconst. | 252 | 80 to 90 | -- |
| United Bank of | 60 to 66 | 8 to 9 | - |
| DQ Entertainment (Inter.) | 75 to 80 | 45 to 50 | -- |
| NMDC (FPO) | 300 to 350 | 20 to 25 | 1900 to 1950 |
| Pradip Overseas | 100 to 110 | 14 to 16 | 1900 to 2000 |
| ILFS Transportation | 242 to 258 | 32 to 33 | 2000 to 2100 |
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Thursday, March 11, 2010
ILFS Transportation Grey Market Premium
Market may remain volatile; food inflation data eyed
The market may open flat to slightly higher on mixed Asian cues. US stocks closed higher on Wednesday, 10 March 2010. Closer home, the government will unveil data on some wholesale price indices for the year through 27 February 2010 viz. the food price index, the primary articles index and the fuel price index at 12:00 IST today.
The wholesale price inflation is unlikely to touch double digits by end-March, M. Govinda Rao, a member of the Prime Minister's Economic Advisory Council, said on Wednesday. The wholesale price index inflation, reached 8.56 % in January 2010.
Chief Economic Advisor Kaushik Basu on Tuesday, 9 March 2010, said inflation would ease by April 2010, with low fiscal deficit and a good rabi (winter) crop improving food supplies. In a couple of months, the slightly lower fiscal deficit will begin to counter inflation, he added. Speaking on the sidelines of a conference in New Delhi Basu said inflation is likely to average 4% in the current financial year.
The industrial output data will be announced by the government on Friday, 12 March 2010 which is expected to rise 16.65% in January 2010 from a year earlier. Industrial output data rose 16.8% in December 2010 over a year earlier.
A strong rise in the output, a 7.2% government growth forecast for the 2009-10 financial year and inflation worries would make for a strong case for the central bank to hike benchmark rates like repo and reverse repo at its April policy review.
Market expectations regarding a possible rate hike in April remain unchanged, after the Reserve Bank of India (RBI) resorted to a sharper than expected 75 basis point hike in cash reserve requirements for banks at its January meeting. Market watchers expect the RBI's next move will be to raise both its benchmark lending and borrowing rates rates by at least 25 bps each to 5.00% and 3.50% respectively.
However, the newly elected president of industry body FICCI Rajan Bharti Mittal said on Monday there's no room for hardening of interest rates and the Reserve Bank of India should maintain status quo on the rates to allow the industry to make fresh investments. He added that fresh investment announcement have begun across sectors and further increase in interest rates will only hamper economic growth.
Reserve Bank of India (RBI) Governor D Subbarao on Monday, 8 March 2010, said inflation should moderate in the coming months. He said the central bank will ensure that interest rate levels do not have a negative impact on the competitiveness of the economy. Should India need to manage inflationary expectations, the central bank could turn to its traditional mix of policy tools including use of both liquidity and cash reserve requirements, he said.
Finance minister Pranab Mukherjee's budgetary proposals late last month offered a progressive cut in fiscal deficit over the next three fiscal years, changed personal tax rates lifting disposable incomes in the hand of individuals and reduced surcharge on corporate tax for domestic companies to 7.5% from 10%.
Meanwhile, the follow-on public offer (FPO) of iron ore miner NMDC received tepid response which was subscribed 17% on the first day of the issue on Wednesday, NSE data showed. The government is divesting 8.38% stake in NMDC through the FPO as a part of its aggressive divestment drive to raise funds in a bid to bring fiscal deficit down. The company's FPO will close on Friday, 12 March 2010. The price band has been fixed between Rs 300 and 350.
After the Union government approval, the board of state-owned telecom company Bharat Sanchar Nigam (BSNL) on Wednesday cleared a proposal for the divestment of 30% government equity in it, as suggested by a committee set up under Sam Pitroda, the prime minister's telecom and infrastructure advisor. The board also accepted the three-member Pitroda panel's proposal to reduce BSNL's 300,000 staffers by a third. In addition, it accepted the Pitroda recommendation to have a contract-based appointment system for top management, separate positions for MD and CEO and a formation of an advisory board.
Going ahead, the key triggers for the stock market are structural reforms such as decontrol of petrol and diesel prices, targeting of food subsidies, and financial sector reforms such as increase in foreign direct investment in insurance sector.
Meanwhile, the fourth and the last installment of advance tax by India Inc due on 15 March 2010 will give a broad indication of fourth quarter earnings.
Asian markets were mixed on Thursday amid mixed economic news and after U.S. stocks closed with small gains following a report that companies cut their inventories. Japan's Nikkei 225 stock average rose 0.89%. The government reported Thursday that Japan's economy, the world's second biggest, expanded at a slower pace in the final three months of last year than initially estimated.
The Shanghai composite index rose 0.19%. China's inflation spiked in February, raising the chances Beijing will need to cool the country's economic recovery. South Korea's benchmark index Kospi was flat after the country's central bank left its key interest rate at a record low Thursday.
The key benchmark indices in Hong Kong and Taiwan fell by between 0.04% to 0.06%. Indonesia's Jakarta Composite rose 0.27%.
The US stocks closed higher on Wednesday, 10 March 2010 led by financials and technology stocks. Staples and telecoms were the biggest decliners. At the end of trade the Dow closed flat at 10,567. Nasdaq rose 0.75% and the S&P 500 index gained 0.45%. In economic news, wholesales inventories unexpectedly fell 0.2% in January as sales rose to their highest level since October 2008. Economists had expected to see a 0.2-percent increase in inventories. In other data, mortgage applications rose last week even as mortgage rates rose.
The industry output figures for Italy and France were stronger than expected in January but analysts said there was little in the data to suggest a broader pick-up in euro zone economic growth.
The Greek economy is set to shrink by more than expected this year, the government said on Wednesday, as it braced for nationwide strikes protesting its plans for bringing the country's budget deficit under control.
Closer home the key benchmark indices eked out small gains mimicking mild gains in global stocks on Wednesday, 10 March 2010. The BSE 30-share Sensex rose 45.79 points or 0.27% to 17,098.33 on that day.
As per provisional figures on NSE, foreign funds bought shares worth Rs 364.36 crore and domestic funds sold shares worth Rs 375.42 crore on Wednesday.
IDFC Ltd
We recommend a buy in the stock of Infrastructure Development Finance Company (IDFC) from a short-term horizon. It is apparent from the charts that after encountering resistance around Rs 180 in November 2009, the stock was on medium-term correction until it found support around Rs 142 in early February 2010. Subsequently, the stock started to move upwards, it penetrated the medium-term downtrend-line as well as 50-day moving average conclusively on February 26. Moreover, the stock appears to have resumed its long-term uptrend that has been in place since March 2009.
The stock is hovering well above its 21- and 50-day moving averages. The daily relative strength index has re-entered the bullish zone and weekly RSI is on the brink of entering this zone. Both the daily and weekly prices change indicators are hovering in the positive territory implying buying interest. Our short-term forecast is bullish on the stock. We anticipate it's upward journey to prolong until it hits our price target of Rs 182 in the short-term. Traders can consider buying the stock while maintaining stop-loss at Rs 156.
via BL
Daily News Roundup - March 11 2010
SBI to tap retail bond market next year with a 10-year issue. (ET)
RIL has leased an ultra deep water drill ship to boost offshore exploration. (BS)
Tata Steel hit by Orissa Government blanket mining ban order. (BL)
ITC arm to invest Rs11bn in Bhadrachalam paper plant. (BL)
NMDC FPO received bids for 17% of the share on day one. (ET)
NMDC and Nagarjuna Fertilizer are scouting for phosphate mines abroad. (BL)
Government says no FPO offers in IOC and ONGC as of now. (BL)
SBI prefers rights issue over FPO says Chairman OP Bhatt. (BS)
Adani Power out of race to supply power to Gujarat Urja Vikas Nigam. (BS)
Thermax has formed a JV with Babcock and Wilcox for making super critical boilers. (ET)
Jayshree Tea is close to acquiring a company in agro commodity space. (ET)
Supreme Infra wins an order for Rs4.5bn.
Maharashtra Government forms a JV with TCS for a 10-year e-governance project. (ET)
Special auditors submit report on Bharti Airtel to DoT. (ET)
SpiceJet to launch its international operation in June. (ET)
Nagarjuna Fertilizer to form subsidiary in Mauritius. (ET)
GVK Power and Infra arm bags Hydro Power Project worth Rs50bn in J&K. (ET)
SAIL plans to increase annual capacity to 26mn tons by 2014. (ET)
Videocon Industries has fixed right issue price at Rs225 per share. (ET)
Essar Oil interested in building new oil refineries in Indonesia. (ET)
Mphasis will announce salary increment in May. (ET)
P&G increases grammage of Tide Naturals by 25% without any hike in price. (ET)
BSNL board approves Pitroda panel report on 30% stake sale. (ET)
Disinvestment department has return to DoT seeking to know the listing plans for BSNL. (ET)
Dow and S&P 500 index would be soon available on NSE in Indian rupee term. (ET)
Government is considering allowing FI’s to guarantee bond issued by infrastructure companies. (ET)
RBI data indicates that second half bank loan grew by Rs376bn. (ET)
Domestic steel prices may rise next month on higher input cost. (ET)
Tyres production rises by 16% yoy to 79.2mn units during first 10-months of FY10. (BL)
Establishing our world!
To establish oneself in the world, one has to do all one can to appear established.
The Indian equity market appears set to establish its hold. For all those who wake up trying to track how the Nifty is performing on the Singapore Stock Exchange (SGX), there will probably be another breed of investors who will now stay awake to watch the Dow and S&P 500 being traded on our exchange.
Meanwhile, stocks appear to have settled into yet another consolidation phase with no substantial newsflow to trigger direction. Traded volumes have been a bit disappointing even as flows from FIIs have improved. The post Budget feel-good factor which actually coincided with global optimism seems to have ebbed slightly. For lack of other things, fourth quarter results, RBI’s annual policy meeting and monsoon could provide fresh direction going ahead. On the global front, it is going to be more of a mixed bag. External events could surprise on both sides- negative as well as positive.
Today we expect flat to a slightly higher start. US indices have gained overnight. European stocks too advanced while Asian markets are mostly in the green zone. On the technical front, 5150 is proving to be a tough resistance for the NSE Nifty. If it manages to surpass that barrier, the next obstacle could come at around 5190-5200. On the down side, strong support is expected at 5000. Though the UPA is under no real threat, one needs to keep an eye on the developments in the capital.
FIIs were net buyers in the cash segment on Wednesday at Rs3.64bn on a provisional basis. Local funds were net sellers of Rs3.75bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs1.55bn. On Tuesday, FIIs were net buyers of Rs17.7bn in the cash segment.
Elsewhere in the world, the US monthly deficit stood at record $221bn in February. Japan's Q4 growth has been revised down to 0.9% vs initial 1.1%. Bank of Korea has kept its key policy rate unchanged at 2%. Australia's unemployment rate has gone up to 5.3% in February. China's consumer price index (CPI) is up 2.7% from year-earlier, above 2.4% forecast.
US stocks edged higher for a second straight day on Wednesday, thanks to a rally in the financial sector led by American International Group (AIG) and Citigroup, which conducted a successful offering of $2 billion in securities. US bank stocks rose, led by Zions Bancorp, Regions Financial Corp. and SunTrust Banks, amid speculation about mergers and acquisitions in the space.
The Nasdaq ended at its highest level in more than 18 months due to strength in the financial sector and an upbeat report on wholesale inventories. The tech-laced index closed up 18.27 points or 0.78% at 2,358.95. The Dow Jones Industrial Average rose 3 points, or less than 0.1%, to end at 10,567.33. The S&P 500 index advanced 5 points, or 0.5%, to 1,145.
The Nasdaq closed at its highest level since August 2008. Wednesday marked the 10th anniversary of the Nasdaq's all-time closing high of 5,048.62 at the peak of the dot-com bubble.
Market breadth was positive.
Traders said volumes have been declining this week as many market participants have moved to the sidelines amid a lack of market-moving economic reports. The US market has stalled, with the S&P 500 struggling to push past its Jan. 19 high of 1,150. "Until that happens, the market is just going to drift.
The dollar slipped versus the euro but rose against the yen and the pound.
The price of oil rose 60 cents to settle at $82.09 after hitting a high of $83.03 earlier in the session.
Meanwhile, the price of gold fell $14.20 to close at $1,108.10 an ounce.
The price of the 10-year note fell, pushing up the yield to 3.71%. The government sold $21 billion worth of reopened 10-year notes on Wednesday as part of a $74 billion offering of U.S. debt this week.
Bank stocks advanced on upbeat analyst comments and bullish statements from some executives. Citibank rose 3.6% after the company priced a $2 billion offering of trust-preferred securities. Bank of America gained nearly 2%.
AIG soared over 10% as investors cheered the insurance giant's recent asset sales. Fannie Mae and Freddie Mac also gained significant ground.
Shares of energy producers weakened as oil prices pared earlier gains. Oil briefly traded above $83 a barrel after the government reported a smaller-than-expected increase in oil supplies and a dip in gasoline inventory but ended 60 cents higher to settle at $82.09 a barrel. Gold prices fell.
The US Commerce Department said wholesale inventories fell 0.2% in January, after a 1% drop the month before, raising expectations that consumer demand is strengthening.
Separately, the Labor Department said fewer states reported increases in unemployment in January.
The Treasury Department said the government suffered a record $220.9 billion budget deficit in February, after a shortfall of $42.6 billion in January. It was the 17th consecutive monthly deficit and was slightly smaller than the $221 billion shortfall economists had forecast.
Shares of Facet Biotech surged 66% after Abbott Labs announced plans to acquire the company for $27 a share. Abbott gained about 0.7%.
Airline stocks rallied on growing expectations that 2010 is shaping into a profitable year for the industry. Shares of UAL, holding company for United Airlines, and Continental Airlines surged about 5%.
China reported a 46% increase in exports during February. The rise was due in part to stronger demand from consumers in the US and Europe, analysts said.
Investors will turn Thursday to the government's weekly report on initial claims for unemployment benefits. Economists expect claims to have risen last week by 9,000 to 460,000. The Census Bureau's report on the January trade gap is also due out on Thursday.
It was yet another insipid trading session for the Indian markets with the benchmark indices registering modest gains. After being under pressure for majority of the day, markets managed to recover some losses towards the fag end shutting shop off intra-day lows.
The NSE Nifty which broke below the 5100 levels nearly three times during the day, held on to the important level thanks to index heavyweights Reliance Industries and HDFC Bank. While the 17,000 mark remained intact on the BSE Sensex.
However, the breath on the BSE Sensex was negative, out of the total 2905 stocks, 1648 declined as against 1185 advances and 72 remained unchanged.
Among the 30-components of Sensex, 18 stocks ended in the positive and 12 ended in the red.
The BSE Sensex advanced 46 points to end at 17,098 after touching a high of 17,183 and a low of 17,028. The NSE Nifty added 15 points to end at 5,116.
In Asia, the Nikkei in Japan ended flat, while Australia's S&P/ASX also remained unchanged and Hang Seng index in Hong Kong also ended flat.
Even in Europe stocks were trading flat. The DAX in Germany was up 0.2%; the CAC 40 index in France was up 0.2% and the FTSE in the UK was flat.
Coming back to India, among the BSE sectoral indices, the Oil & Gas index was the top gainer, adding 1%, followed by the FMCG index that was up 0.8% and the BSE Realty index was up 0.6%.
Among the losers were BSE Teck index down 0.5% and BSE IT index down 0.4%. Even, the BSE Mid-Cap index was down 0.2% and BSE Small-Cap index was down 0.3%.
Outside the frontline indices, the big gainers in the broader market were M&M Finance, IDFC, Thermax and Indian Hotels. On the other hand, losers included Balrampur Chini, Renuka Sugars, Adani Ent and RCF.
Thermax announced the formation of a strategic joint venture with Babcock & Wilcox Power Generation Group, Inc. to engineer, manufacture and supply supercritical boilers for the Indian power sector. The Joint venture will also manufacture subcritical boilers over 300MW in size.
The stock gained 2.3% to end at Rs671. It opened at Rs658 it touched an intra-day high of Rs680 and a low of Rs658 and recorded volumes of over 0.18mn shares on NSE.
Texmo Pipes and Products, manufacturer of PVC pipes had a scintillating debut on Wednesday. The stock shot up to Rs139 as against its issue price of Rs90 per share, translating into a premium of 54%.
The company had come out with a public issue of 5mn shares in a price band of Rs85 to Rs90 each to raise over Rs425mn. The IPO of Texmo Pipes & Products Limited received subscription of 7.48 times.
The QIBs portion received subscription of 1.02 times with bids for 2499900 equity shares against the offer of 2450000 equity shares. The Non Institutional Investors portion was subscribed 30.4962 times receiving bids for 22414725 equity shares against the offer of 735000 equity shares. The Retail Individual Investors portion of the issue received subscription of 7.26 times.
The company proposes to invest the proceeds to expand its PVC pipes capacity by 66%, start making pipefittings and diversify in woven sacks by October 2010. Post-IPO, the promoter group’s stake in the company will come down to 55.6% from the current 100%.
After being under pressure in the previous trading session, shares of Tata Motors bounced back and gained by 1% to end at Rs780 after Tata Sons and Citigroup Global Markets Mauritius Pvt. acquired the 8.65mn shares from Daimler AG.
Daimler AG had sold its 5.34% stake or 25.5mn equity shares in Tata Motors through a block deal on Tuesday morning, the deal was done at an average price of Rs750 per share on the BSE. Through this share sale, Daimler AG managed to raise Rs19.12bn.
US stocks end higher for second straight day
Financial and technology sectors support indices
US stocks managed to end higher for second straight day on Wednesday, 10 March, 2010. It was mainly due to the support from the financial sector that stocks managed to end in the green. The dollar slipped today.
At the end of the day on Wednesday, the Dow Jones Industrial Average ended higher by 2.95 points at 10567.33. Nasdaq ended higher by 18.27 points at 2358.95. S&P 500 ended higher by 5.16 points at 1145.61. Dow opened 15 points higher earlier during the day and was trading higher by 27 points at one time.
Seven of ten economic sectors ended higher for the day led by the financial, technology and energy sectors. Telecom, materials, and consumer staples were the main laggards.
JP Morgan Chase and Bank of America were the main Dow winners while Chevron, Caterpillar, and Merck were the main Dow laggards.
Stocks were subdued ahead of the opening bell, but the broader market got a quick lift from financials. Citigroup was up sharply amid a positive reaction to its $2 billion trust preferred offering. AIG was also up sharply on heavy volume as its upward momentum remained strong following several divestitures.
Technology closely followed financials in supporting the market. Its strength helped send the Nasdaq Composite to a fresh 52-week high. This marks the third straight session that the tech-rich index has outperformed its counterparts. Among tech plays, semiconductor stocks were particularly strong. Stock wise, Google supported the index after the search giant said it would soon conclude negotiations with the Chinese government regarding censorship and monitoring of its Chinese sites.
Despite strength in tech and financials, the two largest sectors in the broader market by market weight, the broader market fell under a bit of pressure during mid session.
The Treasury released its budget statement for February during noon hours. It showed a deficit of $220.9 billion, which is essentially in step with the $222.0 billion consensus, but deeper than the $193.9 billion deficit that was recorded for January. The report did not affect stocks.
Among economic data for the day, the first piece of this week's data was the release of wholesale inventories for January. Inventories unexpectedly slipped 0.2% suggesting stronger-than-expected demand.
In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.
Crude prices ended higher on Wednesday, 10 March 2010. Prices closed above $82. Prices rose as crude supplies rose less than expected for last week and due to anticipation of higher demand in the coming months. On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $82.09/barrel (higher by $0.60 or 0.7%). Prices rose to a high of $83.12 during intra day trading.
In the latest weekly inventory report, the EIA reported today that crude-oil supplies were up 1.4 million barrels in the week ended 5 March as against an expected figure of 2.1 million barrels. The EIA also reported a drop of 2.9 million barrels in gasoline stocks and a drop of 2.2 million barrels in supplies of distillates, which include heating oil.
In the latest report, OPEC reported today that it now expects world oil demand to grow by 900,000 barrels a day in 2010. This represents an upward revision of 100,000 barrels a day from the previous assessment.
Indian ADRs ended mixed on Wednesday. HDFC Bank and MTNL were the main gainers soaring 4.6% and 3.1% respectively. Rediff.com was the main loser shedding 1.9%.
For tomorrow, the economic data expected are the initial claims, continuing claims and trade balance data. Other than that, earning reports will continue to pour in tomorrow.
Pradip Overseas IPO Review
Promoted by Pradipkumar Karia, Chetan Karia and Vishal Karia, Pradip Overseas is one of the few niche textile companies in India focused on home linen products in wider and narrow width. Currently, the company has facilities at Changodar near Ahmedabad in Gujarat.
The company caters to both domestic and export markets. The order book as on February 15, 2010 was Rs 333.78 crore, comprising export orders worth Rs 101.51 crore and domestic orders worth Rs 232.27 crore. Exports constitute around 45-50% of the net sales in the past three years. Majority of the company exports are indirect exports and primarily shipped to American and European markets. The company has also makes small quantity of garments, dress materials and bottom wear fabrics, primarily for international markets and has drawn up plans to scale it up. Apart from these value added products, it is also looking at industrial textiles as potential opportunity. The company aims to grow business in all existing markets, i.e. India, Europe and North America and also intends to explore markets in Middle East, East Africa and Russia. The company is also focusing on value added products such as quilts and organic cotton home Lenin products.
The existing manufacturing facility at Changodhar has been granted authorization, according to Oeko-Tex Standard 100, to use the Oeko-Tex mark for articles, namely bed sets (made-ups), woven fabrics made out of 100% cotton and polyester, bleached, reactive dyed, reactive printed, dispersed dyed and dispersed printed and pigment printed (inclusive sewing threads, buttons and zippers), produced by/ using material certified according to Oeko-Tex Standard 100. In a move to strengthen the business presence, the company has also received permission from International Development LLC, Tampa, FL, USA (IDL) for using and marketing the brand, Lucy B Linens, for home linen products in India and other pertinent countries. The company distributes its home linen products through C A Patel Textiles, which has a retail network of more than 2,000 retailers across the country.
The company has drawn up plans to expand its current capacity from 136.5 million meters to 169.50 million meters per annum by setting up manufacturing facility in a proposed textile SEZ near Bhamasra Village, Ahemadabad, Gujarat. Expanded capacity is to be commissioned by January 2011. The capacity expansion will require Rs 99.95 crore and additional working capital will require Rs 99.95 crore. IPO funds will yield Rs 106-Rs 116 crore
Strengths:
* Capacity utilization continuously improving. From 86.32% in FY 2007, it has improved to 90.57% in FY 2008 and then jumped to 97.92% in FY 2009. In the nine month ended December 2009, it stands at 95.96% on increased capacity.
Weakness:
* The company operates in a highly competitive market and faces stiff competition from other organized players in this segment and also from the unorganized sector.
* The textile industry is cyclical and sensitive to the changes in the global economy. The home textile sector is export oriented and so is more vulnerable to global economic and liquidity factors.
* The company is also implementing textile SEZ. Funds have not been tied up and certain other formalities are yet to be completed.
Valuation
The company has posted a 78% jump in net sales to Rs 1170.58 crore. Of this, trading sales amounted to Rs 225.08 crore. There was a modest 8% increase in net profit to Rs 41.46 crore in FY 2009. Sales for the nine months ended December 2009 were Rs 1216.83 crore (trading sales Rs 200.40crore), with net profit being Rs 51.10 crore. The annualized EPS for the nine months on post issue equity works out to Rs 16.9. At the offer price band of Rs 100- Rs 110 per share, PE works out to 5.9-6.5 times. Alok Industries and Welspun India are trading at P/E of 7.2 and 5.2 times their nine-month annualized EPS.
Copper weakens
Red metal gives up earlier gains
Copper prices pared earlier gains and ended lower at Comex on Wednesday, 10 March 2010. Prices pared earlier gains due to demand concerns.
At USA, copper futures for March delivery ended marginally lower by 4.4 cents (1.5%) at $3.36 a pound. In February, copper ended higher by 7.1%. Copper ended FY 2009 higher by 140%.
At LME, copper for delivery in three months ended lower by 0.1% at $7,500. On 3 July, 2008, prices had touched an all time intra day high of $8,940.
Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user.
The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.
Copper advanced earlier after a report that showed China's trade surplus narrowed further in February to $7.6 billion from $14.2 billion in January due to soaring imports, reflecting growing domestic consumption.
In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.
In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.
At the MCX, copper for February delivery closed lower by Rs 0.8 (0.2%) at Rs 341.3/Kg. Prices rose to a high of Rs 345/Kg and fell to a low of Rs 335/Kg during the day's trading.
Among other metals traded in the LME on Wednesday, lead ended 0.2% higher at $2,250 a ton and zinc ended 0.5% higher at $2,390 a ton. Nickel ended 0.4% lower at $22,050. Aluminum ended 0.4% lower at $2,201 a ton.
Bullion metals shed more glaze
Prices pare earlier gains
Precious metal prices ended little lower on Wednesday, 10 March, 2010. Prices pared earlier gains. Prices increased earlier during the day following China's economic data.
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 Wednesday, gold for April delivery ended at $1,122.3 an ounce, lower by $1.7 (0.2%) an ounce on the New York Mercantile Exchange. It rose to a high of $1,128.3 earlier during the day. Last week, gold gained 1.4%. In FY 2010, gold touched a high of $1,154 in January.
On Wednesday, May Comex silver futures ended lower by 5 cents (0.3%) at $17.29 an ounce. Last week, silver ended higher by almost 8%.
Gold and other metals advanced earlier after a report that showed China's trade surplus narrowed further in February to $7.6 billion from $14.2 billion in January due to soaring imports, reflecting growing domestic consumption.
In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
At the MCX, gold prices for April delivery closed lower by Rs 20 (1%) at Rs 16,707 per ten grams. Prices rose to a high of Rs 16,783 per 10 grams and fell to a low of Rs 16,561 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 40 (0.2%) lower at Rs 26,993/Kg. Prices opened at Rs 26,832/kg and fell to a low of Rs 27,020/Kg during the day's trading.
Crude closes above $82
Prices rise on demand hopes and less than expected buildup in crude supplies
Crude prices ended higher on Wednesday, 10 March 2010. Prices closed above $82. Prices rose as crude supplies rose less than expected for last week and due to anticipation of higher demand in the coming months.
On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $82.09/barrel (higher by $0.60 or 0.7%). Prices rose to a high of $83.12 during intra day trading. Prices gained 2% last week.
Crude prices rose 9.3% in February as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar. Prices have ranged between $69 and $84 a barrel since October. Crude has risen 72.7% in last one year.
In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.
In the latest weekly inventory report, the EIA reported today that crude-oil supplies were up 1.4 million barrels in the week ended 5 March as against an expected figure of 2.1 million barrels. The EIA also reported a drop of 2.9 million barrels in gasoline stocks and a drop of 2.2 million barrels in supplies of distillates, which include heating oil.
In the latest report, OPEC reported today that it now expects world oil demand to grow by 900,000 barrels a day in 2010. This represents an upward revision of 100,000 barrels a day from the previous assessment.
Yesterday, in the latest monthly report, the EIA had reported that it now expects oil consumption growth of 1.5 million barrels a day this year, up from 1.2 million barrels a day in last month's outlook. As per the report, with that demand, oil prices should stabilize above $80 a barrel. The report also detailed that with this, price of crude oil is to average above $80 a barrel this spring, then rise to about $82 a barrel by the end of the year. Crude should climb to $85 a barrel by the end of 2011.
Among other energy products on Wednesday, gasoline for April delivery finished up 3 cents at $2.29 a gallon, while heating oil for the same month rose 3.1 cents to $2.12 a gallon.
Also on Wednesday, April natural gas rose 4.4 cents to $4.56 per million British thermal units.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 45% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for February delivery closed Rs 32 (0.9%) higher at Rs 3,757/barrel. Natural gas for March delivery closed at Rs 206/mmbtu, lower by Rs 0.5 (0.18%).
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