Posts Tagged ‘equity markets’

COMMODITY WEEKLY COMMENTARY 27th September – 1st October

Gold prices hover around its life time highs last week on international as well as on domestic bourses as European stock markets extended their losses and crude oil dropped below $75 per barrel. However domestic silver futures gain reclaimed a new life time high on MCX while U.S silver hit a 30-year high as precious and base metals were further aided by a weaker dollar along with new data meantime revealed a downturn in European services and manufacturing output.

.

A further decline in U.K mortgage and business lending, plus higher-than-expected U.S jobless claims for last week also supported the bullion counter last week. Base metal prices which were mostly trading lower during the beginning of the week bounced back strongly in the later part as investors moved to buy dollar denominated commodities to take advantage of fall in the dollar index. US equity markets ended lower as data indicated that house prices fell in July marking the eighth consecutive decline. Fed bought $2.07 billion worth of bonds, thereby boosting treasury prices and dollar continued to lose ground. In energy counter crude prices witnessed see saw moves during the week on mixed fundamentals. Crude traded below $75 per barrel as jitters increased due to the rise in U.S inventories highlighting weak demand, in spite of the dollar’s continued drop against its major rivals.

.

Yellow spice turmeric showed wonderful recovery on dip in arrivals amid lower level buying. Domestic demand is expected to be strong during the ongoing festival season. With the same reason of dip in arrival, chilli futures also spurt in both spot and future market. Pepper surrendered its strength on heavy selling pressure, weak export demand in the middle of sluggish spot market. Fresh arrivals put pressure on jeera and cardamom futures and they closed the week on negative note. Fresh buying noticed in chana futures. Indian oil seeds and edible oil futures were moving on their own fundamentals. Fall in dollar index supported the price. Comfortable stocks could not give much impact on the prices. Soyabean and crude palm oil moved northward. Refined soya oil and mustard seed also closed the week on positive note.

.

Fear of yield loss due to excessive rain in producing areas lent support to the guar counter; however upside was limited on lack of aggressive fresh buying. Technical support zoomed up mentha oil. Furthermore, temporary supply propped up potato in both physical and future market.

.

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

.

Share/Bookmark

Weekly Update 30th August – 3rd September 2010

The global equity markets fell in the week gone by after a record plunge in U.S. home sales and slowing export growth in Japan raised concerns that developed economies are losing momentum. However losses in the equity markets were recouped during the end of the week when Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank “will do all that it can” to safeguard the recovery and growth and stronger-than-forecast U.S. economic growth eased concern the world’s biggest economy will return to recession. According to the EPFR Global, risk aversion led global investors to put some $5.2 billion into bonds and withdrew a net $7.1 billion from equity funds worldwide.

.

.

European Central Bank President Jean-Claude Trichet called for immediate fiscal austerity measures. He said that the lesson from past history is that dealing with the legacy of accumulated imbalances is not simply a duty to be fulfilled after the economic recovery, but rather an important precondition for sustaining a durable recovery.

.

However he was skeptical of the argument that cutting back deficits now would risk derailing the recovery. Bank of Japan is expected to hold an emergency meeting next week to consider more monetary easing and Japan’s Prime Minister is expected to give economic stimulus package as strong appreciation in Yen to 15 year high against the dollar is threatening the export-led recovery.

.

On the domestic front, RBI in its Annual Report said that the growth outlook for the current fiscal year is robust but inflation has emerged as a major concern. It said that it would remain committed to contain generalized inflationary pressures through its calibrated monetary policy based on careful assessment of risks to both inflation and growth.

.

Going next week, investors will keep an eye over the GDP growth number for the first quarter of 2010-2011 to be released on 31st August. The expansion in the economy is expected to match up the growth of 8.6 percent seen in the last quarter of the fiscal 2009-2010. Stock specific activity, specifically in Auto and Cement stocks may not be ruled out as companies would be reporting monthly production numbers.

.

In comparison to world indices, Indian markets are still in the better position as it fell marginally lower as comparised to global counterparts. On the weekly closing basis, dollar index is struggling around 83.50 levels which may trigger technical recovery across the board especially in the US and European markets. Accordingly, one should opt for staying long for the next week till our levels withhold. Nifty has support between 5350- 5300 and Sensex between 17800-17600 levels.

.

Risk aversion in the financial markets may continue to keep the safe haven appeal of bullions intact. US GDP came slightly lower than previous figure but was better than expected. Fed comments to safe guard the US economy may extend some support to the base metals counter however the continued weakness in the housing and job sector may keep the upside capped. Fed commented that the central bank will act if “unexpected developments” cause the recovery to falter. Euro zone GDP and US housing data next week will guide the movement in crude oil and base metals pack in near term. Crude oil may trade choppy as marginal short covering can be witnessed in near term.

.

In Agri pack bears may keep the selling pressure intact especially in spices complex. Oilseeds complex may witness an increased activity as the fundamental storyline in the global markets as well as in the domestic, have improved. India’s new business opportunity of soy meal export to Thailand & China’s strong export demand for U.S soybean crop coupled with strength in crude oil futures may provide psychological support to attract buying. Outflow of Potato stocks from UP cold storages and farmers eying the exports to Pakistan may provide some support to the prices.

.

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

.

Share/Bookmark

Weekly Update 10th – 14th May

The stock markets around the world are more or less trying to top out at higher levels. World markets are falling like ninepins on the back of fear that Europe’s debt crisis could spread in other European Union countries and may upset the global economic recovery. The hope of some rescue package tabled down when Trichet made the statement that the ECB’s 22-member Governing Council didn’t discuss buying government debt to stem the contagion.

.

Markets from Europe to US tumbled as high as 11 percent during the week. Indian markets too ended their journey in deep red in the week gone by after concerns of sovereign debts in Europe sparked sharp sell-off in global equities.

.

The worst hit were sectors like metal, realty, cap good and banks while oil & gas bucked the trend. In another event, Fitch downgraded the ratings for Chinese banks and has improved outlook for Indian banks. Quality of growth & large speculative investments funding by Chinese banks is the concern area. Whereas the tighter provisioning norms by Indian banks regulator has led to the improvement in Indian bank’s outlook. As a matter of fact European Union comprising of 27 countries accounts close to 19 percent share in India’s total exports & thus may affect the manufacturing sector.

.

The European crisis may also affect the overall sentiments of the industry and could affect the fund raising plans of companies in India & abroad. The risk aversion in global equity markets resulted in large withdrawal by foreign institutions & the money sought its place in safe haven like bonds & gold.

.

Now all are eying how European leaders will come forward to halt the fiscal worries & prevent a sovereign debt crisis after European Commission President Jose Barroso said that they will defend Euro, whatever it takes.With the crisis looming, Inflation, a major concern may not be a worry factor with the metals & crude prices coming down. And the central banks in world over may keep up the liquidity & may not tinker with the interest rates for an extended term.

.

The week went by saw a sharp rise in volatility along with a major fall in stock markets around the world. Even the Base metal commodities tanked down though precious metals that is Gold and Silver saw a sharp rally in times of uncertainty. Overall trend of all world markets including ours is down now. Nifty faces resistance between 5200-5100 levels and Sensex between 17500-17000 levels.

.

On the commodity front, continued debt contagion fears in Europe triggered blood bath in some commodities, especially in metals and energy. It also resulted in terrific rally in gold, which is not a general phenomenon. Expected hung parliament in UK may also give boost up to dollar index. Back at home, depreciation in local currency also added volatility. As regards trend of metals and energy in short run, after witnessing a razor sharp fall, these commodities may trade in range, however, overall trend is still down, except gold and silver.

.

Agro commodities performed better on improved fundamentals. Buy at dip could be a good strategy for agro commodities.

RBI, Monetary Projections And Indian Economy

Hello Friends,

Just an extension of our previous blog ”RBI And Its Policies – Part 1″.

RBI, Monetary Projections And Indian Economy

RBI, Monetary Projections And Indian Economy

In this Blog we would touch upon the aspects as that of Monetary projection from RBI, assessment of economy scenario at present and relevance of RBI policy on economy.

Monetary projection:

For policy purposes, money supply (M3) growth for 2009-10 is placed at 17.0 per cent, down from 18.0 per cent projected in the Annual Policy Statement.

Consistent with this, aggregate deposits of scheduled commercial banks are projected to grow by 18.0 per cent.

The growth in adjusted nonfood credit, including investment in bonds/debentures/shares of public sector undertakings and private corporate sector and Commercial Papers (CPs), has been revised downwards at 18.0 per cent as in the Annual Policy Statement.

🙂

Economy:

Since the last review in July 2009, there has been a discernable improvement in the global economy.

The recovery is underpinned by output expansion in emerging market economies, particularly in Asia.

World output has improved in the second quarter, manufacturing activity has picked up, trade is recovering, financial market conditions are improving, and risk appetite is returning.

🙂

A sharp recovery in equity markets has enabled banks to raise capital to repair their balance sheets.

If we talk about the home country then there are definitive indications of the economy attaining the ‘escape velocity‘ and reverting to the growth track.

🙂

The performance of the industrial sector has improved markedly in recent months.

Domestic and external financing conditions are on the upturn.

Capital inflows have revived.

Moreover activity in the primary capital market has picked up and funding from non-bank domestic sources has eased.

Liquidity conditions have remained easy and interest rates have softened in the money and credit markets.

Growth projection for GDP for 2009-10 on current assessment is placed at 6.0% with an upward bias, the same as the previous policy review.

But some darker parts also persist.

There are clear signs of rising inflation stemming largely from the supply side, particularly from food prices.

Private consumption demand is yet to pick up.

Agricultural production is expected to decline.

Services sector growth remains below trend.

Bank credit growth continues to be sluggish.

The central bank has warned of possible asset price bubbles, raised banks’ provisioning requirements for commercial real estate loans and lifted inflation forecast.

WPI inflation for end-March 2010 is projected at 6.5 per cent with an upward bias.

This is once again higher than the projection of 5.0 per cent made in the Annual Policy Statement in July 2009.

🙂

Stay Tuned for more on the topic.

We would look into Monetary Policy stance, more facts about economic indicators and Analysis from the Analyst from monetary point of view.

Note : For More Finance Gyan, Latest Industry, Stock Market, Economy News and Updates, please click here

Coming ‘Diwali’ – Gold Prices Set to Reach Over, Rs 16,000 level :)

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

After taking a brief consolidation, gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before ‘Diwali’.

🙂

According to experts, gold prices have declined for a short period last week as the precious metal dipped following a counter rally taken by the dollar.

However, the US dollar index has again started showing weakness and today dipped by 0.6 per cent at 76.54 level, which will be positive for the gold price, SMC Global’s Rajesh Jain said.

🙂

He said gold is likely to reach 1,020 dollar an ounce (28.34 grams) level in the international markets before ‘Diwali’.

However, in the domestic market the rising trend is likely to be capped with strengthening of Rupee against the US dollar, he added.

In the domestic market the prices are likely to be slightly over Rs 16,000 per 10 grams level, Jain said.

He said, the Rupee will keep on strengthening as the equity markets are performing well, which will encourage the Foreign Institutional Investors (FIIs) to bring in more money.

🙂

Today, the gold was trading at Rs 15,585 per 10 grams, while in the global markets it was at $1,001 an ounce.

Meanwhile, independent analysts have remarked that the bull run in gold will continue as the various monetary and fiscal stimulus programs have failed to boost the world economy, feeding through to a dis-inflationary conditions.

🙂

The US dollar, which is considered a safe haven, softens due to the weakening economic condition.

As dollar declines, many investors and central banks continue to hold gold as their safe haven to protect themselves from unforeseen global economic shocks, boosting the demand for the yellow metal.

🙂

Foreign Investors Poured $9 Billion in Indian Stock Market :)

Foreign_Investment


Foreign investors have poured Rs 43,837 crore (USD 9.05 billion) into the country’s stock markets so far this year, reflecting confidence of foreign funds in the Indian equity markets.

🙂

At the close on Wednesday, overseas investors were gross buyer of shares worth 4,17,121 crore and gross sellers of stocks valued at Rs 3,73,283 crore, resulting in a net flow of Rs 43,837 crore into the stock markets so far this year.

This latest data has been announced by the market regulator Securities and Exchange Board of India (SEBI).

🙂

Significantly, the Bombay Stock Exchange benchmark Sensex has gained nearly 73 per cent so far this year.

🙂

The National Stock Exchange barometer Nifty – composed of 50 shares — has also advanced fairly and for the first time in more than a year it touched 5,000 level on Thursday.

(Read more about that on previous blog).

Global fund houses have made a total net investment of Rs 3,564 crore so far in September, according to the SEBI data.

🙂

After pulling out a huge sum of Rs 52,986 crore (USD 11.9 billion) from the local stock markets, foreign investors are now moving their money towards emerging economies like India.

🙂

However in debt market segment, overseas investors have not turned net investor so far this year.

FIIs were net sellers of debt instruments worth Rs 527 crore (USD 49 million) in 2009 so far according to the latest data received from the market regulatory body,SEBI.

🙂

Airline industry loss in 1st half : Over $6 billion !!

Airlines industry


Even as fresh figures showed some signs of revival in the passenger and freight business, Airline companies lost more than $6 billion during the first half of the year due to the economic downturn.

😦

However, it is said that a sample of more than 50 airlines found their losses declined to $2 billion in the second quarter from $4 billion in the first quarter.

Moreover, since the sample of airlines is incomplete, total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion.

😦

Additionally, the Geneva-based group, which represents 230 airlines worldwide, stated that seat occupancy in international markets stabilized in July but airlines need to further cut capacity to meet demand.

🙂

In addition, freight capacity also still exceeds demand despite an 8.1% capacity cut in July but with excess capacity continuing through Q2 it was not surprising that freight rates were down more than 20% over the year.

😦

However, it is said that companies increased their aircraft numbers by a net of 487, or about 2% of their overall fleet.

Replacement and expansion of the fleet has delivered significant fuel efficiency savings.

🙂

Additionally, airline shares have risen 7.4% since the start of the year, lagging behind overall market improvements of 23%.

😦

While, stronger equity markets gave airlines an opportunity to raise more cash whereas airlines have raised $3 billion of equity and $12 billion from new debt issues since the start of the year.

🙂