Posts Tagged ‘Indian Meteorological Department’

Weekly Update 26th – 30th April 2010

Domestic markets started the week on a negative note on the back of the Greek debt issues and Goldman Sachs fraud issues, but managed to close in the positive terrain supported by firm US markets in line with less than expected hike in Policy Rates & Cash Reserve Ratio by RBI to tame the inflation; Policy rates and CRR increased by 25 bps each. The food price index rose 17.65% in the 12 months to April 10, marginally higher than an annual rise of 17.22% in the previous week. Moreover IMF announcement of India`s growth at 8.5% for the calendar 2011 boosted the sentiments.

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Additionally, announcement of government recapitalization of PSU banks stimulated banking sector and banking stocks were among the major gainers of the week. Good corporate numbers, expectation of good monsoon together with buying by foreign institutions kept the momentum intact for the rest of the week. Going forward market participants globally would be closely watching G20 finance chiefs plan to withdraw economic stimulus as the recovery strengthens.

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The IMF this week said that rising government debt is one of the biggest threats to the world economy.

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Forecast of normal monsoon season by Indian Meteorological department may keep the sentiments positive in the coming week but volatility may rise ahead of the expiry. On the global front, the UK’s economy grew at a slower than anticipated pace in the first quarter. In US, sales of new homes surged by 27 percent in March and orders for most durable goods climbed, indicating the U.S. economy is speeding ahead into the second quarter. Greece troubles that kept the markets jittery especially for the payments approaching in the month of May came to an end after it said that it has sought a relief aid from the European Union to save it from a default.

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US stock markets kept the rally intact which held the other world markets and did not let them fall.

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Shanghai remained under pressure as commodities saw some pressure and profit booking at higher levels. Indian stocks are seeing more strength in cash stocks and banking stocks. Nifty has support between 5200-5100 levels and Sensex between 17400-17200 levels.

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This week is full of event risk, especially from US economy side. Gradually, commodity is retreating from the higher levels but it will be too early to say that it is giving a clear indication for the approaching time. But yes, upside is limited.

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Negative expectation of US GDP figure for the first quarter may hammer the prices. If dollar index trades above the level of 82 then it would keep gold to be in sideways territory. Copper saw three weeks nonstop downside and it is expected to see more downside. Range trading in crude oil is indicating the saturation at the higher levels and market needs big news to see further upside..

Weekly Update 5th-9th April

Domestic markets continued to build on the gains for the eighth consecutive week. The undertone remained buoyant as the growth signs are becoming clearer. A closer look on the gains gives impression that emerging economies would continue as a favorite investment destination. Hopes of good result season, continued buying by foreign institutional investors & recent upgrade of India’s credit rating are some of the factors that are keeping up the investment momentum in the market. On the global front, in US the recent payroll data has further boosted the confidence among the investors as it looks the deepest recession has ended.

Payrolls, a major indicator rose by 162,000 workers, the third gain in the past five months and the most since March 2007. Home prices in US unexpectedly rose in January for an eighth month. Home prices in 20 US cities rose 0.3% in January, indicating the housing market is stabilizing as the economy expands.

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According to some estimates US economy probably grew by 2.8 percent in the first quarter of 2010 after a 5.6 percent pace of expansion in the fourth quarter of 2009. Apart from the tightening in monitory policy by RBI the other trigger for the markets would be monsoon forecast. A healthy monsoon would improve agriculture output & thereby rural incomes. It would also be crucial from the inflation point of view, as it is still a worry factor & may affect the growth momentum.

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Tokyo-based Research Institute for Global Change has predicted normal monsoon rains in India for the current year. The Indian Meteorological Department (IMD) issues a monsoon forecast, usually in the second half of April after considering weather observations in different parts of the world and extrapolating statistical data.

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Overall trend of world stock markets is up and Commodities which were under pressure some time back also had a good rally last week. It seems now the mid cap and small cap are leading with mainline Nifty or Sensex lagging behind. The global liquidity is leading to various asset classes being chased by investors at every reaction. Nifty has support between 5150-5050 levels and Sensex between 17200-16800 levels.

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Firm U.S., Chinese and European manufacturing figures along with decline in SHFE and LME stockpiles may continue to keep the base metals on upbeat note. Lack of clear risk sentiment may keep gold directionless. Drop in U.S. jobless claims may lend further support to crude prices. Oil prices have risen about 23 percent from early February as the industrial sector leads a gradual recovery in the US economy. Possible new round of sanctions against Iran, maybe within weeks rather than months, could be underpinning the crude market.

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Spices pack may extend further gains while oilseeds may witness some short covering.