Posts Tagged ‘bears’

Marginal Dip in December’s Rubber Production

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Marginal Dip in December's Rubber Production

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Marginal dip in Dec rubber production:-

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Midway through the peak period, rubber production dipped marginally by 2 per cent to 98,000 tonnes in December against 1.00225 lakh tonnes last year.

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However, with industrial recovery firmly under way, rubber consumption remains robust, growing 17 per cent to 79,500 tonnes.

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Preliminary indications show severe slippage in Malaysia’s rubber production and India is likely to become the world’s third-largest producer of natural rubber after Thailand and Indonesia.

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🙂

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In Other major Commodities Updates we can read that domestic pepper futures market continues to remain highly volatile and Sugar prices expected to remain higher in the coming month.

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Pepper futures continue to remain volatile:-

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The domestic pepper futures market continued to remain highly volatile because of the tug of war between the bulls and the bears.

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The prices were falling without any co-relation to the fundamentals.

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Spot prices fell from Rs 15,000 a quintal to Rs 13,700 in about a month.

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The reasons attributed included arrivals of the new crop, huge outstanding position in the January delivery and easing of other origins and so on.

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Around 1,200 tonnes of pepper would have its validity expired on Feb 5 and that is expected to be tendered for delivery and thus it might also enter the market.

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Sugar prices may remain firm in coming months:-

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Sugar prices are expected to remain higher in the coming months as lower acreage and poor rains will keep India’soutput at 15.3 million tonnes,

falling severely short of domestic consumption of about 23 million tonnes in the 2009/10 season.

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Global Market Outlook 2009 and 2010 :)

SMC Market Outlook

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With markets giving returns on investment more than 79% in 2009 and showing a strong sign of recovery from mid 2009 on the back of strong domestic demand, policy reforms and stimulus packages, 2009 calendar year emerged as the best year for investors since 2000.

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FII’s have once again proved to be the front runners in terms of the inflow, pumping more than Rs 82,000 crore in the Indian market this calendar.

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But 2010 promises to be another testing year as fiscal and monetary stimulus in many of the world’s major economies begins to wane.

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After being in consolidation for most of the month, in the week gone by the domestic markets suddenly jumped back to life and closed at their highest in 19 months as investors rushed to buy stocks on renewed optimism, after foreign direct investment into the nation jumped 60% in the first eight months of this fiscal year.

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The FM`s comments on GDP growth and encouraging cues from global markets also boosted the market.

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Both the indices, Sensex and Nifty made a new high for 2009 on the eve of Christmas, rekindling the festive spirit.

Bulls were in a mood of rejoice as Christmas took Nifty to a new high of 5,197.90.

The year ends with more than a spark of hope, and next year seems to be a stable and profitable one.

However, we believe that markets would continue to be volatile and hence it is important to manage risk in the coming year too.


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For the forthcoming week, markets may remain volatile as traders will roll their positions in the derivative segment from December 2009 series to January 2010 series ahead of the expiry of the near month December 2009 contracts on Thursday, 31 December 2009.

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On the flip side higher advance tax figures by India Inc which suggests better Q3 December 2009 results, may support the market.

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Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter.

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The global developments also need to be seen for any further directions.

Furthermore, food price index data for the year to 19 December 2009 will be closely watched which is going to release on Thursday, 31 December 2009.

The high food price inflation is a major worry for the policymakers as they contemplate a right approach to tame hike in inflation which seems to be more of a supply side issue.

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The next quarterly review of monetary policy is scheduled on 29 January 2010 which may also give some direction to the markets.

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On the global economic front, the US economy grew at a revised annual growth rate of 2.2% in the third quarter, much slower than initially projected.

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Japan’s unemployment rate rose to 5.2 percent from 5.1 percent in October, for the first time in four months in November, an indication job growth may not be strong enough to support the economy’s recovery from its deepest postwar recession.

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The world stock markets are not ready to react on the downside and after every consolidation they are moving up only.

4960 on nifty is strong support as was mentioned in last week magazine and the nifty touched there and moved up sharply.

Even the base metals and stocks are not reacting to the strong dollar.

Till the trend of stock markets is up, one should be playing from the long side of it.

Nifty has support between 5050-4970 and Sensex between 17100-16700 levels.

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New Year celebration may result in thin trading this week.It may impact domestic bourses as well.

Regarding outlook, dollar index will give next direction to precious metals. If it notices a pause in its rally then precious metals may trade in a range or vice a versa.

Base metals will remain volatile.

Gap between lead and zinc should shrink gradually.

Fresh buying in steel may keep nickel at higher side.

If US crude and other inventories continue to decline then fresh buying will stimulate in crude oil.

However, it already saw spiky moves hence upside is limited.

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COMMODITY WEEKLY COMMENTARY

Most of the commodities finished lower last week on heavy profit booking. Recent bounce back in dollar index compelled commodity traders to quit their long positions. However, some commodities viz., aluminum, nickel and natural gas moved on their own fundamentals and ignored the upside of dollar index. Threat of closure of two mines of Alcoa amid the concern that about three quarters of LME  stockpiles have been tied up by long term financing deals by traders and merchants, raised the premium
on aluminum, sent aluminum prices higher.

Likewise, nickel surged on lower level buying. Rest of the  base metals erased their previous gains to some extent on rise in dollar index amid some negative data.

Gold and silver gave up their previous gain due to the improvement in dollar value. However, recent fall in gold prices brought back smile on consumers face and there is an expectation that import will increase. Negative data, fall in GDP of Japanese economy, higher dollar amid expectation of slower demand of crude in 2010 by EIA hammered crude oil prices and it touched two months low. On the contrary, natural gas jumped on increased seasonal demand. Cold snaps in northwest and Midwest revived the demand of natural gas and it recovered across the bourses, where natural gas is used 72% for heating purpose.

Coming to agro commodities, bears completely dominated all commodities. Selling pressure was witnessed throughout the week. Some short covering in many agro commodities witnessed on Friday.
Less demand from processors amid declining export queries exerted pressure on guar complex. Oil seeds and edible oil complex reacted on improvement in dollar amid new crop estimation by Brazil and Argentina generated selling in futures as well spot market across the board. Fall in crude oil prices gave further pressure on prices. Spices made lower trading range last week. Higher Indian parity, lower export queries in the middle of subdued domestic demand compelled spices to trade low.

Speculative activities in turmeric were on high last week. Throughout the week, December contract traded into upper circuits and April contracts traded moreover on lower side, which increased the gap between contracts to more than 3400 level. Wheat futures cooled down owing to increased supply in spot market. Crushing season of sugarcane has already started which has led to a nonstop decline since last three weeks.

Bear and Bull – Part 1

Hello Friends here we come up with our another write up on “SMC Gyan Series” 🙂

Have you all ever wondered that what exactly this Bull and Bear Market is ?

 

Bull markets and bear markets...what are they?

Bull markets and bear markets...what are they?

What are they? What do they look like? What’s the origin of this terminologies?

Lets Talk about it

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When we talk about bull and bear stock markets it reminds us that it’s a zoo out there. And, like any zoo, there are quite a few wild species to be found 😉

The first two are the bulls and the bears.

Bull market is when stock prices are climbing strongly and a Bear market is when they’re languishing.

Bear Market

To be more precisely, in finance, a bear market is a market condition that occurs when the prices of shares decline or are about to decline.

Figures may vary, but if prices decrease by 15 to 20% then the market is assumed as a bear market.

In general, a bear market resumes if the government goes into recession and if the inflation rate is high.

Bull Market

A bull market is a condition of a financial market of a group of securities in which prices are rising or are expected to rise.

The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.

Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue.

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Myth About Bull and Bear Markets

One common myth is that the terms “bull market” and “bear market” are derived from the way those animals attack a foe, because bears attack by swiping their paws downward and bulls toss their horns upward.

This is a useful mnemonic, but is not the true origin of the terms.

Long ago, “bear skin jobbers” were known for selling bear skins that they did not own; i.e., the bears had not yet been caught.

This was the original source of the term “bear”.

This term eventually was used to describe short sellers, speculators who sold shares that they did not own, bought after a price drop, and then delivered the shares.

Because bull and bear baiting were once popular sports, “bulls” was understood as the opposite of “bears.” I.e., the bulls were those people who bought in the expectation that a stock price would rise, not fall.

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Stay Tuned for more on this where we would touch upon if bull and bear markets are inevitable and what are the basics investors should keep in mind while trading in bear and bull market.