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Tuesday, October 06, 2009
US stocks end their losing streak
Financial sector and weak dollar push stocks higher
US stocks managed to end their four day losing streak and end with strong gains on Monday, 05 October, 2009. Stocks started the day with little gains but then picked up momentum. The momentum was spurred by the financial sector and weak dollar. Strength among banks lifted the financial sector. The better than expected economic report also added as an additional catalyst, though stocks did not react much to it during the initial hours.
Twenty four of thirty Dow components ended the day with gains. Exxon Mobil, Chevron, Caterpillar, JP Morgan Chase and 3M were the main Dow winners. Travellers, Microsoft, P&G, Coco Cola and WalMart were the main Dow losers.
All the ten economic sectors also ended with gains after the consumer staples sector erased its earlier losses and ultimately ended higher.
Stocks were hit with a bit of midmorning selling pressure shortly after a better-than-expected September ISM Services Index report. The Institute for Supply Management reported on Monday, 05 October, 2009 that the service sectors of the United States expanded in September for the first time in a year.
As per the report, the ISM non-manufacturing index rose to 50.9% from 48.4% in August. This is the highest level since May 2008 and the first time in a year that the index was above the break-even 50% mark. The report detailed that the new-orders index and the business activity index both hit their highest levels since Oct. 2007. The new-orders index rose to 54.2% from 49.9% in August. The business activity index rose to 55.1% from 51.3% in the previous month.
The banking sector was a major gainer today at Wall Street after analysts at Goldman Sachs raised their rating on the U.S. large-cap bank sector.
Crude prices ended higher at Nymex on Monday, 05 October, 2009. Prices rose following a better than expected economic data in the service sector. The weak dollar also came to crude's rescue. On Monday, crude-oil futures for light sweet crude for November delivery closed at $70.41/barrel (higher by $0.46 or 0.71%). During intra day trading, it fell to a low of $68.05. Last week, crude ended higher by 6%.
In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.
Barring MTNL and WNS Technologies, all the Indian ADRs ended in the green today. Rediff.com and ICICI Bank were the largest gainers today going up by 8.8% and 4.8% respectively.
For tomorrow, there are no major economic data or economic report scheduled for the day.
Idea Cellular
We recommend a sell in Idea Cellular from a short-term perspective. It is evident from the charts of the stock that it has been on medium-term downtrend from its June high of Rs 91.7. In early September, the stock penetrated its intermediate-term uptrend-line that was in place from March low of Rs 41. In the same period it also breached its 21- and 50-day moving averages and is trading below them. Moreover, on October 5, the stock tumbled 4 per cent with above average volume, breaking through medium-term support of Rs 73. The daily momentum indicators have entered the bearish territory and weekly indicators are slipping towards this territory. We are bearish on the counter from a short-term horizon. We expect the stock’s decline to prolong until it hits our price target of Rs 63.5. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 74.5.
via BL
Precious metals shine again
Prices rise for second consecutive day
Precious metal prices ended higher for second straight day on Monday, 05 October, 2009. Prices rose as dollar continued to stay weak for the entire day today.
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 Monday, gold for December delivery ended at $1,017.8, higher by $13.6 (1.3%) an ounce on the New York Mercantile Exchange. During intra day trading, gold rose to a high of $1,018.9. Last week, gold ended higher by 1.3%. Year to date, gold prices are higher by 15.3%.
Gold ended September, 2009 higher by 5.9%. For the third quarter it ended higher by 8.7%. 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 (2.5%) since then.
On Monday, Comex silver futures for December delivery rose 30.5 cents (1.9%) to $16.535 an ounce.
Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 47.4% this year. For 2008, silver had lost 24%.
In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for December delivery closed higher by Rs 56 (0.35%) at Rs 15,659 per 10 grams. Prices rose to a high of Rs 15,679 per 10 grams and fell to a low of Rs 15,514 per 10 grams during the day's trading.
At the MCX, silver prices for December delivery closed Rs 246 (0.94%) higher at Rs 26,312/Kg. Prices opened at Rs 25,972/kg and rose to a high of Rs 26,333/Kg during the day's trading.
Copper climbs up
Economic report adds some glamour to red metal prices
Copper prices rose on Monday, 05 October, 2009 at Comex and LME. Prices rose at Comex following upbeat economic report.
At USA, copper futures for December delivery ended higher by 4.55 cents (1.7%) to 2.727 a pound. Copper dropped 2.2% last week. It was the fifth straight weekly drop for copper. Copper ended September, 2009, higher by 0.4%.
On the London Metal Exchange, copper for delivery in three months ended higher by $6 (0.1%) at $5,886 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.
After September, it was the ninth straight monthly gain for copper. On a year to date basis, prices are higher by 85%.
The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.
The Institute for Supply Management reported on Monday, 05 October, 2009 that the service sectors of the United States expanded in September for the first time in a year. As per the report, the ISM non-manufacturing index rose to 50.9% from 48.4% in August. This is the highest level since May 2008 and the first time in a year that the index was above the break-even 50% mark.
In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.
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 November delivery closed at Rs 286.2/Kg. The closing price was Rs 0.35/Kg (0.12%) higher than previous closing price. Prices rose to a high of Rs 286.75/ Kg and fell to a low of Rs 280.8/Kg during the day's trading.
Among other metals traded in the LME on Monday, lead added 0.75% to $2,145 a ton and zinc added 1% to end at $1,863 a ton. Nickel fell 0.9% to end at $17,250. Aluminium rose 0.6% to $1,794 a ton.
Crude tops $70
Prices manage to eke out gains
Crude prices ended higher at Nymex on Monday, 05 October, 2009. Prices rose following a better than expected economic data in the service sector. The weak dollar also came to crude's rescue.
On Monday, crude-oil futures for light sweet crude for November delivery closed at $70.41/barrel (higher by $0.46 or 0.71%). During intra day trading, it fell to a low of $68.05. Last week, crude ended higher by 6%.
For the month of September, 2009, crude ended higher by a marginal 0.9%. For the third quarter, crude ended higher by just 1%. Crude prices had rallied 40% and 11.3% in the second and first quarter of 2009 respectively.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 66% since then. Year to date, in 2009, crude prices are higher by 43.3%.
The Institute for Supply Management reported on Monday, 05 October, 2009 that the service sectors of the United States expanded in September for the first time in a year. As per the report, the ISM non-manufacturing index rose to 50.9% from 48.4% in August. This is the highest level since May 2008 and the first time in a year that the index was above the break-even 50% mark.
In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.
Among other energy products on Monday, November reformulated gasoline rose 1 cent, or 1%, to $1.75 a gallon and November heating oil gained slightly to $1.79 a gallon.
Also on Monday, November natural-gas futures rose 28 cents, or 6%, to $4.99 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for October delivery closed higher by Re 1(0.02%) at Rs 3,349/barrel. Natural gas for October delivery closed higher by Rs 9.7 (4.3%) at Rs 235.5/mmbtu.
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