Posts Tagged ‘Dollar’

SILVER……GROWING AVENUE OF INVESTMENT

Recently silver, known as poor’s gold, is gaining not only against the dollar and other old world currencies but also outperforming gold. Due to high prices gold is loosing its own attraction from common man and importance of silver as precious metals is gaining momentum. The declining trend of gold/silver ratio indicate that silver become better destination for investment. Like gold, silver has retained rally momentum due to recent poor economic data that has caused investors to purchase Silver as a “safe haven” alternative investment. The pickup of silver industrial demand due to the emergence and growth of a number of new end uses, and continued strong investment demand is pushing silver prices sharply higher.

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Like all metals, London Bullion Market is the global hub for silver trading, while the New York’s Comex Futures dominate the solver fund activity. The world’s largest silver backed exchange-traded fund, the i Shares Silver Trust, said its holdings rose to 9,280.40 tonnes by Sept. 1 from 9,151.03 tonnes on August 5.

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Global demand- supply of silver According to World Silver Survey 2010 , global silver mine production rose last year, by almost 4%, its seventh straight annual increase to reach a record high of 22,072 ton.Peru is the world’s largest silver producing country followed by Mexico, China, Australia and Bolivia. GFMS is forecasting a further mine production rise of 3 per cent this year.

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According to GFMS, In the last ten years, the world jewellery demand was down 8 per cent and silverware as much as 38 per cent. And because of technology changes silver use in photography sector had suffered a major fall of 62 per cent. But as strengthening of belief in silver as a precious metal is the 145 per cent demand gain since 2000. The industrial application of silver is almost 48 per cent of total silver use.

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Indian demand- supply of silver Though India is generally believed to have a great appetite for gold, Indians also love to possess silver in their homes for jewellery. India is voluminous importer of silver. Of the 4,000 tonnes that India used to import annually, around 2,600 tonnes was used to make jewellery and ornaments. MMTC is the largest importer of gold in the country. The firm’s silver imports fell by more than 44% in the fiscal year to end March 2010, as high prices dented demand. More than 60% of India’s silver demand comes from farmers.

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Last year silver demand dipped because the country experienced one of the worst monsoon seasons in over four decades. However, with much better monsoon this year, the situation is set to reverse and India’s appetite for silver has also been boosted because gold has become too expensive at current prices. According to official data, India’s silver imports in the first six months of 2010 are up 579%.

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From April this year, India has also started hallmarking of the white precious metal to ensure purity. With increasing amounts of impurities in jewellery being sold across the country, public sector trading major, Minerals and Metals Trading Corporation (MMTC) is banking on its branded jewellery, silverware gift items and coins to push up its market share.

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Like gold, silver has not enjoyed equal recognition from hedge funds, pension and retirement funds, insurance companies, and sovereign wealth funds– but this is likely to change as fund managers recognize silver’s relative value and simply wish to diversify their precious metals exposure.

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Outlook

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Good monsoon, high gold prices and global trends may help silver outperform the yellow metal in India. Better harvesting will underpin demand from the farming community this year. Since gold prices are trading over `19,000 per 10 gm, many rural families are now switching to silver.The weakening of rupee also supporting the prices.

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More and more people here are using silver as a speculative commodity play as many others are looking at it as a safe haven asset. The overall market sentiment is bullish for silver. So it could be a more decisive silver price breakout before the year ends to touch the level of `33500.

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OUR Websites:  http://www.smcindiaonline.com,http://www.smccapitals.com,
http://www.smctradeonline.comhttp://www.smcwealth.com

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Commodity Trading :)

As you know we already have discussed about commodity trading but missed some of the points. So here we are discussing those points 🙂

What is a Trend in Commodity Trading?

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When prices are steadily moving higher or lower over a period of time it is considered as a trend. If prices are rising over time it is consider an uptrend. If prices are declining over a period of time then it is considered a downtrend.

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Reason behind following the trend is that prices are more likely to continue in that same direction than reverse. We can put the odds in our favor by trading this way.

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Tips on how to follow the Trend

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We can’t predict how high or low a market is going to move. Therefore, if we are following trends, we can catch some very profitable moves in the commodity markets.

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Two common ways to enter the markets when we spot a trend:

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  • Buy on a pullback. When the market is moving higher for ten days in a row, wait for a 2-3 day where prices decline and then buy.

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  • Buy when the market makes new highs. It is the hardest thing for many traders to do.

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Remember we should trade with the trend of the market to increase our chances of success. 🙂

What is Day Trading?

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Day trading is the process of buying and selling a futures contract(s) within the same day. Day trades can last for a couple minutes or sometimes they are held for most of the trading session. Day trading is not recommended for new futures traders since it takes a lot of knowledge, experience and discipline to day trade futures successfully.

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What are Futures Options?

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Buy or sell a futures contract at a designated strike price is the right of an option not an obligation. We buy options to bet on the price of a futures contract to go higher or lower for trading purposes. There are two main types of options – calls and puts.

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Calls –If we believe the underlying futures price will move higher we can buy a call option. For example, if we expect soybean futures to move higher, we will want to buy a corn call option..

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Puts –If we believe the underlying futures price will move lower we can buy a put option. For example, if we expect corn futures to move lower, we will want to buy a soybean put option.

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Benefits of Online Trading

Trading commodities online is almost a one-stop shop. Most online brokers will have real time quotes, charts, futures news, technical analysis programs and research available for their clients. This has opened the door for online traders to make more of their own trading decisions and implement trading strategies that once were not available to the average retail trader.

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If you are going to day trade commodities and futures, you definitely want to trade online, unless you have someone else managing your account.

SMC Comtrade Limited, a key constituent of SMC Group of Companies, came into existence since the very start of Commodity Exchanges in India. With nationwide presence, it is enabling the retail & corporate investors to diversify their portfolio and enjoy the benefits of trading in MCX, NCDEX & NMCE. Its highly appreciated research team guides the investors in making wise investment decisions for agri-commodities as well as international commodities.

SMC Comex International DMCC (part of SMC Group) is one of the initial, leading & experienced, clearing and broking member of Dubai Gold and Commodities Exchange (DGCX). It offers trading in Gold, Silver, Crude (WTI & Brent), Forex (INR, Euro, Dollar & sterling) and Steel Rebar Contracts.

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We provide various trading solutions to suit clients’ requirements. Our products are tailored to provide convenience to the clients & keep them satisfied. We offer Commodities Trading in offline mode as well as online mode; client can trade at the comfort of his home / office at any time using our platform.

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Which are the most prominent commodity exchanges across the world?

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  1. Chicago Board of Trade (CBOT )

  2. Chicago Mercantile Exchange (CME)

  3. New York Board of Trade (NYBOT)

  4. New York Mercantile Exchange (NYMEX)

  5. London Metal Exchange (LME)

  6. London International Financial Futures Options Exchange (LIFFE)

  7. The Tokyo Commodity Exchange (TOCOM)

  8. Kuala Lumpur Commodity Exchange (KLCE)

  9. Bursa Malaysia Derivatives Exchange.

Stay Tuned for more and more on this :)


However For More latest Industry,Stock Market and Economy News Updates,Click Here

CURRENCY FUTURE – BETTER FUTURE FOR CURRENCY TRADERS

There is good news for currency traders who would like to trade in currency futures. After trading in dollar-rupee futures, now corporate and retail investors will also be able to trade in currencies such as Euro, and Japanese Yen.

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Currently dollar-rupee futures are trading on three recognized exchanges, NSE, MCX Stock Exchange and BSE. But the currency derivative is liquid only on the first two bourses, which have together posted an average daily turnover of around Rs. 18,566 crore in December, up from a couple of thousand crore when the currency futures trading commenced in the second-half of 2008.

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NSE commenced currency futures trading in India on 29th August 2008. It has witnessed healthy growth in the turnover and open interest positions during its first completed month of currency futures trading in India.

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Brief of currency future

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Currency futures contracts are those contracts which allow investors to hedge against foreign exchange risk and traders to speculate on the movement in Currency. Since these contracts are marked-to-market daily, investors can exit from their obligation to buy or sell the currency prior to the contract’s delivery date.

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Major Profitable accounts

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The introduction of new currency pairs will go a long way in helping market participants, especially international traders, hedge against cross-currency Volatility and mitigate risk in export and imports across all major traded currencies and will add depth to the exchange-traded currency futures market.

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Along with the above mentioned participants, Currency futures trading in India has generated huge interest among Indian retail investors and traders.

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There is a strong demand for information gathering about the intricacies of currency futures from small investors and enterprises. For instance, entities that have borrowings in Euro will get one more avenue, apart from the over-the-counter market that is dominated by banks, to hedge them against volatility in the 16-nation common currency.

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Due to the transparent mechanism of execution in currency futures trade, increased participation by corporations and high net worth individuals, too, could be witnessed.

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Contract specification

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As in the case of the dollar-rupee futures, the contract size has been fixed at 1,000 units each for pound and euro, and 100,000 units for the yen, across 12 concurrently available contracts, one for each month.

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The contracts, like the existing dollar futures, would be cash-settled in rupees and the settlement price would be at RBI’s reference rate for all the four currencies.

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However, there are different initial margins (cash) that an investor needs to put up for trading each currency on day one and subsequently though this has not been changed for the dollar.

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The market regulator has also decided to modify the calendar spread margin to be applied on the dollar-rupee contracts.

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All the new contracts would be quoted in rupee terms, while the outstanding positions would be in the respective foreign currency terms.

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The maximum maturity of the contract would be 12 months, while all monthly maturities from 1 to 12 months would be made available.

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The contracts would be settled in cash in rupees.

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The client-level position limit has been capped at 6 per cent of the total open interest position.

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Responses:

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Market participants responded enthusiastically to the inclusion of these new currency pairs. The three new currency pairs clocked Rs. 1,98,761 contracts resulting from 7,762 trades at a total value of Rs. 1,277.13-crore on the NSE on day first, which is approximately comes out to be 9.61 percent of the total turnover in value terms. Out of the three new pairs, euro-rupee (EURINR) was the most traded currency pair clocking 1, 82,013 contracts.

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Total contracts and open interest in EUR/INR and GBP/INR:



First Traders inception of currency futures 🙂

The first trade in the new currency pairs was executed by East India Securities, IndusInd Bank executed the first trade amongst banks. Union Bank was the first PSU bank to trade and execute the single largest trade. ICICI Bank and State Bank also participated actively. This market has now become bigger than the cash segment of the equity market, which recorded average volumes of Rs. 20,000 crore last month.

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The beauty of exchange-traded currency futures are that they allow a participant to directly buy or sell the Dollar,Euro,Yen or GBP without having an underlying exposure, so it’s also a view-based market. One can take this opportunity of investing smartly in currency futures and gain by every tick.

Stay Tuned for More updates 🙂

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Weekly Update of The Market (15th – 19th February)

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and latest global business and industry updates.

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Weekly Update of The Market (15th - 19th February)

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The much awaited gains in global markets which came in the week gone by, was a big relief for investors.

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Improving Australian Jobless rate (falling) to 5.3% from 5.5% & China‘s lending surged to 1.39 trillion yuan ($203 billion) in January, more than in the previous three months together lowered the concerns of global economic recovery and proved to be some of the triggers for the global markets gain.

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European Union statement that it is ready to support Greece somewhat eased pressure but China central bank another move to hike reserve requirement by 50 basis point to rein the credit growth spoiled the mood of the markets.

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Chinese banks disbursed 19% of the lending target in January alone.

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The existing reserve requirements stood at 16 percent for the biggest banks and 14 percent for smaller ones.

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🙂

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Back at home, CSO expectations of decline in farm output to be contained within 0.2 per cent & robust recovery in industrial performance rejoiced the markets that GDP growth may come even better for the current fiscal year.

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On the flip side, market is cautious from budget outcomes on expected move towards fiscal consolidation.

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High fiscal deficit together with high inflation pose some long term risk for the equity market.

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The much awaited reforms in the areas FDI, BFSI & fuel and fertilizer subsidiary & a roadmap for implementation of Goods & Services Tax & Direct Tax Code can spark the rally in the domestic market.

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In the coming week, we may see some activity in capital goods sector on the back of very good IIP numbers.

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Industrial production witnessed a growth of 16.8% on Year on Year basis while cumulative growth for the April to December period has now inched up to 8.6% over the corresponding period.

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Overall the trend of most asset classes including stock markets around the world is down due to rising dollar index.

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Going ahead in the budget, we expect volatility to increase and markets to see big moves up and down.

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🙂

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International cues are positive on the fundamental side but Europe problems and stimulus withdrawal along with rising inflation are having negative effect.

One should remain cautious going ahead.

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Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

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A pick up in investor’s sentiments, softer dollar amid expectation of rescue plan for Greece have rejuvenated most of the commodities, especially metals and energy.

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We are expecting a thin trading in the beginning of the week, as US market is closed on Monday on the occasion of “President Day”.

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Absence of participation of Chinese market due to celebration of New Year holidays can limit the volatility of commodities further.

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If we talk about the trend, overall commodities may trade in a range now.

Any improvement in Japanese GDP data can give further boost in the prices.

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🙂

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Stay Tuned for More on weekly updates.

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Market Experts Expect IT Stocks to Do Well During 3rd Quarter

Market Experts Expects IT Stocks to Do Well During 3rd Quarter

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With IT Biggy Infosys showing up with better-than-expected results and revenue guidance, IT stocks have turn out to be hot picks.

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This is owing to the factor that market participants are now anticipating good third quarter results on improved global demand scenario.

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Month-to-date, the BSE IT index has returned 4.16 per cent against a marginal 0.51 per cent advance in the BSE Sensex.

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Where IT biggies have climbed as much as 5 per cent during the period, mid-cap and small-cap IT stocks have followed the cues even better.

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“The Infosys numbers have set the tone for the IT sector. The numbers posted by the sector for the third quarter of financial year 2009-10 are encouraging and even the guidance is optimistic.

The analysis shows that revenue visibility has gone up,” said Jagannadham Thunuguntla, head of research at SMC Capitals.

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Financial Technologies shot up 20.55 per cent. Tech Mahindra climbed 14.77 per cent.

Patni Computer jumped 7.20 per cent followed by Polaris Software, Rolta India, MindTree and MphasiS, which climbed 4.67 per cent, 4.11 per cent and 0.33 per cent respectively.

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However, MphasiS and Redington India inched down 0.41 per cent and 0.45 per cent respectively.

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“We expect IT service companies to be more optimistic regarding the macro environment compared with the stance in the previous few quarters.

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While 2010 IT budgets are likely to be flat with a positive bias, managements might not provide significant clarity on them,” the brokerage added.

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The years 2009 and 2010 underline a significant recovery in business optimism and economic conditions.

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Thunuguntla feels signs of recovery have also started appearing in the US and in the global financial sector, which was the genesis of the financial crisis.

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In such a situation, there is no reason why the Indian IT sector shouldn’t do well during the third quarter.

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Understandably, the sector’s fortunes are linked to the value and fluctuation in the dollar.

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A strengthening dollar can put pressure on the profitability margins of IT companies.

But, IT volumes still remain strong, and sector should see healthy performance.

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🙂

EQUITY MARKET OVERVIEW JANUARY 2010

EQUITY MARKET OVERVIEW JANUARY 2010

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The year 2009 was an unconventional year with surprises galore.

The sharp recovery in the benchmark Sensex is evident of the same.

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The year came with some shocks and some surprises, be it Satyam opening the Pandora’s Box, government coming to the rescue through fiscal stimulus or gold touching the new highs.


With appreciation of more than 75%, 2009 calendar year emerged as the best year bringing back hope and strengthening the faith and confidence of investors.

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As we welcome the New Year, let’s have a glance at how was the sunset of 2009 with the happenings in the month of December.


The month started with not much action as the indices were little changed as every rise was seen as an opportunity to book profits as fear of rising inflation barred investors from building large positions.

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The India’s industrial output jumped 11.7% in November 2009 from a year earlier, helped by stimulus measures and robust domestic demand.


The momentum in the country’s industrial output is likely to sustain in the coming months.


The facility for Indian companies to buy back their Foreign Currency Convertible Bonds (FCCBs) under the automatic route and approval route would be discontinued from January 2010 due to the improvement in the equity market.

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The central bank said it would allow non-bank financial companies which are focused on financing infrastructure projects to borrow from overseas markets under the approval route.


During the middle of the month, profit taking pulled the key benchmark indices lower.

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The worst monsoon since 1972 and flood in some parts of the country have pushed up food prices nearly to 17.28% annually in beginning of January, while the headline inflation accelerated to 7.31% in December.


The food supplies need to be boosted to stem the price rise as the current acceleration in inflation rate is not only due to loose monetary stance.


The government towards this, has cut the open sale price of wheat, while ministers have pledged to import food items that are in short supply to boost local supplies and stem inflation.

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Dollar also showed strength and sparked fears of unwinding of dollar carry trade.

The Christmas week saw a ‘Santa Claus’ rally that took the market to 19 months’ closing high in a truncated trading week.

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Further, the latest data showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal.

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The corporate advance tax payments for the quarter were up 44% to Rs.48300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter.


The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.

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Amidst all this, we had the Finance Minister‘s statement that containing inflation and cutting fiscal deficit are the major challenges for the government in the short-to-medium term.


Towards this the government can even alter the proposed draft for the direct tax code to sustain the high economic growth.

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Corn Futures Rose as Weaker Dollar Attract Buyers

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

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers:

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Corn futures rose as a weaker dollar and the biggest weekly decline in 13 months attracted investors and importers.

Wheat and soybeans also rose.

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The dollar weakened as much as 0.2 percent against a basket of six major currencies, extending yesterday’s 0.3 percent loss and making U.S. supplies cheaper for importers.

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Nonghyup Feed Inc., South Korea’s biggest buyer of feed grains, bought 165,000 metric tons of corn for delivery between May and June, said two industry executives who took part in the bidding yesterday.

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Speculative net-long positions, the difference between investors’ orders to buy and sell corn, rose to an 18-month high during the four weeks ended Jan. 12, according to the U.S. Commodity Futures Trading Commission data.

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Short positions, or bets prices will fall, reached a three-year low in the week ended Dec. 29.

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In Other major Commodities Updates we can read that Prime Minister’s Economic Advisory Council is going to monitor impact of futures market trading on food price inflation.

Panel to monitor food futures:

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The Prime Minister’s Economic Advisory Council (PMEAC), headed by C Rangarajan, has asked the commodity futures market regulator to provide it with data showing the impact of futures market trading on food price inflation, said BC Khatua, chairman, Forward Markets Commission (FMC).

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FMC regulates commodity futures trading on four national and nineteen regional bourses.

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The government’s logic is that there would be more data to fall back on now since commodity bourses went live in FY05 than when the Abhijit Sen panel was constituted two and a half years after their inception to study the impact of futures trading on food price inflation.

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The blue ribbon panel led by Mr Sen submitted its report in 2008.

The report found no conclusive evidence of a link between futures trading and food price inflation.

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However, the FMC chairman and industry experts have in the past repeatedly drawn the attention of futures market skeptics to the fact that price of items that were banned from futures trading continued to rise even after the ban.

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Items which continue to remain outside the purview of futures trading include rice, tur, urad and sugar.

Items which were relisted are wheat, rubber, soya oil, potato and chana.

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Wholesale price index-based inflation increased by 7.31% in December 2009 from the corresponding month last year.

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Of this, food article inflation – food articles have a 15.4% weight in the wholesale price index–has risen by 19.17%.

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🙂

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