Posts Tagged ‘international markets’

SUGAR……. “Ambas as extremidades de cana de açúcar não pode ser doce”

In Portuguese language “Ambas as extremidades de cana de açúcar não pode ser doce” means both ends of sugar cane cannot be sweet. Sugar travelling though its notorious cycle has always been continuously gathering news & issues all along these years. Starting with the sugar cycle, it follows a 3-4 years cycle with a bumper harvest resulting in higher inventory levels. Declining prices pressurizes the profits of sugar companies. Going around the downtrend in the sugar cycle starts with increased availability of sugars, decline in sugar prices. This prompts the farmers to switch over to other crops resulting in lower cane production. All these leads to higher sugar prices and the cycle turns around.

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FOREIGN NEWS

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•Mexico published a quota to import 100,000 tonnes of sugar to cover a shortfall in supply until the end of the year.

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•Tight supply supports raw sugar.

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•The US Department of Agriculture (USDA) has pegged India’s sugar production at 23.6 million tonnes, marking an increase of over 26 per cent from last year.

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•Brazil crops shrivel as Amazon dries up to lowest in 47 years.

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•Brazil will harvest 639 million tons in the year started May 1, 3.2 percent less than estimated in April.

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•Australia’s 2010/11 sugar output is being threatened by heavy rain in the northeastern cane growing state of Queensland, disrupting this year’s cane crush.

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•Liffe front-month, December white sugar ends $24.20 higher at $649.80 per tonne after earlier setting a 7-month high for the front month of $661.80 a tonne.

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•Market buoyed by a fresh wave of fund buying and crop concerns in South Africa, Argentina, Mexico and Australia.

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DOMESTIC NEWS

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•Sugar production in Uttar Pradesh, may rise to 6.2 million tonnes from 5.18 million tonnes in the review period.

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•Sugar output in Karnataka is likely to decline marginally to 2.3 million tonnes this year from 2.53 million tonnes last year.

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•Sugar output in Tamil Nadu may jump sharply to 2.1 million tonnes in the 2010-11 crop year from 1.25 million tonnes last year.

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•The output in Gujarat is pegged at 1.3 million tonnes against 1.19 million tonnes last year.

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•Cane growers seek higher prices of 200 rupees ($4.49) per 100 kilograms.

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•NCDEX seeks permission to do futures trading in sugar.

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•The Government has declared lower October sugar quota at 17.50 lakh tonnes (lt) against September’s 19 lt.

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•Sugar imported from India will be tested before its sale in Pakistan, said a minister who rejected the impression that Indian sugar was substandard.

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Seasonality – Indian Scenario

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Analyzing the seasonal index of Indian sugar prices, the prices remain under the pressure till the third quarter of the year. The fourth quarter is a seasonal buying period, as the market witness a recovery because of the festive season.As far as the medium to long-term outlook is considered, the price trends in international markets would be the key determinants of future profitability with the crude oil price trends, which determine the diversion of cane crop to ethanol.

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Soybean oil….. “Prices sail along with the winds over harbor”

Soya bean oil is the second leading vegetable oil traded in the international markets after palm. Palm and Soya bean oils together constitute around 68% global edible oil trade volume, & Soya bean oil alone constitutes of 22.85% of the whole.

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Soybean Oil World Scenario –A SNAP SHOT

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•World Production: U.S. (38%) is the biggest producer of soybeans followed by Brazil (13-18%) and Argentina (27-37%).

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•World Imports: China, Japan, Mexico, Taiwan and South East Asia are major importers of soybeans while India, China, Pakistan, Bangladesh, South & Central American countries (Peru, Venezuela, Bolivia, Dominican Republic) and Africa (Egypt, Morocco) are major buyers of soya oil in world market.

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•World Exports: U.S. is the largest exporter of soybeans while Argentina is the biggest exporter of soy oil followed by Brazil.

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Hot talks………….. China, the world’s biggest user of cooking oils, and Argentina remain in talks about China’s embargo on imports of soybean oil from the South American nation.

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China imports all its soybean oil almost from Argentina and Brazil. India imports nearly 1 million tonnes of soya oil yearly from Argentina, Brazil and US. India imported 192649 tons of Crude Soya oil during June 2010. According to USDA, the country is estimated to import 1.19 million tonnes of soy oil for 2010-11, while China is estimated to import 2.15 million tonnes during the same period.

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China has frozen all Argentine soybean oil imports in retaliation for Buenos Aires decision to restrict imports of Chinese products. The Chinese blocking of Argentine soybean oil threatens a key hard currency earner for the South American nation, estimated at 2 billion US dollars for the current year.

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Domestic scenario: India is the sixth largest producer of soya oil with account of 4% of world production. In India, Madhya Pradesh produces estimated 53% of the country’s soybean followed by Maharashtra (34%) and Rajasthan (8%). It is sown during June-Jul period and harvested by October in India. The domestic production soyabeen is around 1.4 million ton in 2009-10. Almost 70 to 80% of total oilseed production is crushed for oil while the balance quantity goes for food, feed and seed use in the country.

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So total soya oil production is around 0.7-0-8 million ton in 2009-10, While annual consumption is around 2.0-2.2 million ton with a market value of `9000 crore.

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The above chart shows that during January-June 2010, imports of soya oil totalled almost 7.36 lt against 5.99 lt a year ago. According to the Solvent Extractors Association, the increased imports have resulted in inventories building up at the ports.

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Imports getting surge in December 2009 primarily in view of the kharif oilseeds crop hit by the erratic weather and the rupee’s rise against the dollar.

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Kharif production has been estimated at 161 lt against 178 lt last year. Rabi output, however, is seen marginally up at 101.31 lt against 99.11 lt a year ago.

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Spot markets of Indore and Mumbai serve as the ‘reference’ market for Soya oil prices.

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The prices in Indore reflects the domestically crushed soybean oil (refined and solvent extracted) while Mumbai price indicates the imported soy oil price.

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In exchanges….. Futures trading in soya oil essentially serve as the right tool for hedging against market-linked risk by all those in the value chain of the commodity- the soyabean producing farmers, processors, brokers, speculators, soyabean and meal traders, traders of other oilseeds and oils, etc.

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CBOT is the biggest exchange for soybean oil. In India, NCDEX and NBOT are the major exchanges for these commodities. Its contracts are traded with high liquidity. The domestic future prices of soya oil are largely influenced by the international edible price movements (especially Malaysian palm oil and soybean oil at CBOT), soybean availability in domestic markets, demand for meal and other associated supply-demand factors of soybean and its derivatives.

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Current scenario: Refined soyaoil futures is trading up with August and September contracts moving up by 0.45% and 0.54% respectively. August soyoil futures traded at `484.70 while September futures were at `487.50 per 10kg. Crude Soya oil import price is US$ 880 per ton at Mumbai port whereas Crude Palm oil import price is US$ 805 which indicates the difference of less than 10 percent between the two. There is zero import duty on crude soybean oil in India while it is 7.5% for refined oil.

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Seasonal Index – “Time is Money” Final Part

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

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Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

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In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Note : For More Latest Industry, Stock Market and Economy News and updates, please click here

Precious Metals are on Record Setting Spree :)

Precious Metals are on Record Setting Spree

 

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As gold rallied by Rs 80 per ten grams to Rs 17,095 and silver firmed up by Rs 110 per kilo to Rs 28,510 due to constant demand from stockiest on account of rising trend  in global market, both gold and silver resumed at a record high on the bullion market.

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However, due to worries about future inflation and economic uncertaintiesanother record high in the Asian marketgold hit , while Asian stocks bounced back as the bearish dollar kept assets in demand.

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Meanwhile, spot gold increased as high as $1,143.95 per ounce in early Asia trade, settling just above $1,140 while standard gold rose by Rs 80 per ten grams to resume Rs 17,095 from the overnight closing level of Rs 17,015.

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On the other hand, pure gold also firmed up to Rs 17,185 from Rs 17,105 while silver ready too hardened by Rs 110 per kilo to Rs 28,510 from Rs 28,400 previously.

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Earlier due to frantic buying by jewellers in the midst of firming global trend, gold prices touched a record high of Rs 17,300 per 10 gram in the bullion market and Silver coins also set a record by adding Rs 400 to Rs 33,900 for buying and Rs 34,000 for selling of 100 pieces.

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Moreover yesterday silver also rose by Rs 1,000 to Rs 28,350 per kg.

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Sudden Surge and the record setting spree in the precious metals can be attributed to frantic buying of gold in marriage season.

In between, gold in international markets too has climbed to a record high along with the weakening of dollar.

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’.

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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.

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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.

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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.

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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.

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India May Lead the Second Wave of IT Adoption :)

India-lead-IT-adoption-IBM

As companies kept up investments in spite of the downturn and seemed more advanced than their counterpart globally it is said that India may lead the second wave of IT adoption.

IBM Corp. has come up with the concerned statement.

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According to the IBM survey, 40% of Indian companies stated that they wanted to be first to take up a new technology, while 11% said they would wait till technology was widely available.

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Moreover, companies have cut back less and have really continued their investments in India which is balanced to lead the second wave of IT adoption whereas small-and-medium businesses (SMBs) are the engines motivating the economic development.

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On the other hand, recession forced 37% companies worldwide to decrease their IT budgets as compared to 15% in India.

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Further, the IBM recognized India as one of its main growth markets and will continue to invest here along with Brazil, China and Russia.

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Moreover, IBM plans to cash in on the business coming from SMBs representing more than 90% of all businesses employing over 90% of the world’s workforce in order to produce more patents than large firms.

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

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.

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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.

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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.

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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.

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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.

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

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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.

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DAILY EQUITY UPDATE

Equity Update

17 Aug 2009

POST MARKET

The BSE Sensex closed lower by 626.71 points or (4.07%) at 14,784.92 and NSE Nifty ended down by 24.95 points at 4,580.05.

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BSE Mid Caps and Small Caps closed with losses of 218.30 and 200.85 points at 5,385.51 and 6,211.71 respectively.

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The BSE Sensex touched intraday high of 15,284.23 and intraday low of 14,740.63.

Among the Sensex pack all 30 stocks ended in red territory.

The market breadth indicating the overall health of the market remained negative as 1929 stocks closed in red while 674 stocks closed in green and 73 stocks remained unchanged in BSE.

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The S&P CNX Nifty is down by 192.15 points or –4.20 % to 4387.90.

The NSE turnover was down Rs.15425.56 from last trading session’s Rs. 16421.25 crore.

NEWS UPDATES

-Six auto stocks fell on concerns the weak monsoon will slash spending in India’s agricultural regions.

-Fourteen metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 3.05% to 2,932.70 on 14 August 2009.

-Seven power sector shares fell on reports the power ministry is planning to cap the sale price of electricity sold in the open market if the projects claim tax benefits.

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OUTLOOK

Market opened strongly in red & continued trading in negative zone throughout the day on the back of negative cues from the global indices.

International markets were trading strongly in red & remained in the same territory resultant selling pressure in across the board in our markets too.

Realty, Metal, Auto & Oil and gas got punished heavily.

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In the first half of session, we witnessed mixed movement as the market breadth was marginally on the down side but it declined very sharply below crucial support level of 4420 area.

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We expect index to hold 4340-4320 levels as the next crucial support zone with possibility of technical bounce in the next session.

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Daily Equity Update

sector watch

*Realty & Metal are the major losers in today’s session 😦

DAILY EQUITY UPDATE 17 Aug 2009

POST MARKET

The BSE Sensex closed lower by 626.71 points or (4.07%) at 14,784.92 and NSE Nifty ended down by 24.95 points at 4,580.05. BSE Mid Caps and Small Caps closed with losses of 218.30 and 200.85 points at 5,385.51 and 6,211.71 respectively. The BSE Sensex touched intraday high of 15,284.23 and intraday low of 14,740.63.

Among the Sensex pack all 30 stocks ended in red territory. The market breadth indicating the overall health of the market remained negative as 1929 stocks closed in red while 674 stocks closed in green and 73 stocks remained unchanged in BSE. The S&P CNX Nifty is down by 192.15 points or –4.20 % to 4387.90.The NSE turnover was down Rs.15425.56 from last trading session’s Rs. 16421.25 crore.

NEWS UPDATES

-Six auto stocks fell on concerns the weak monsoon will slash spending in India’s agricultural regions.

-Fourteen metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 3.05% to 2,932.70 on 14 August 2009.

-Seven power sector shares fell on reports the power ministry is planning to cap the sale price of electricity sold in the open market if the projects claim tax benefits.

OUTLOOK

Market opened strongly in red & continued trading in negative zone throughout the day on the back of negative cues from the global indices.

International markets were trading strongly in red & remained in the same territory resultant selling pressure in across the board in our markets too.

Realty, Metal, Auto & Oil and gas got punished heavily.

In the first half of session, we witnessed mixed movement as the market breadth was marginally on the down side but it declined very sharply below crucial support level of 4420 area.

We expect index to hold 4340-4320 levels as the next crucial support zone with possibility of technical bounce in the next session.

ECONOMIC INDICATORS – A Key Factor in Currency Trading : Part 1

Economic Indicators – A Key Factor In Currency Trading

Economic indicators are the most concerning part of the currency trading which are released by various agencies of the government or private sectors.

These are published on a regularly scheduled basis which helps market observers to track the pulses of an economy.

They are hardly ignored by anyone who is the participant of the financial markets.

Economic indicators are procyclic and their movement, are directly proportional to the trend of economic performances.

With so many people poised to react to the same information, economic indicators in general have tremendous potential to generate volume and push the sentiments of the people to move prices in the markets.

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Tracking the calendar of economic indicators will also help the market followers to make sense out of otherwise unanticipated price action in the market.

Let’s talk what exactly an investor can derive from these indicators:

Suppose USD has been in a tailspin for three weeks and the trading day is beginning of the week i.e. Monday.

Now it is easily predictable that many traders are holding large short USD positions.

However on Friday the employment data is yet to be released.

It is very obvious that with this key piece of economic information as it is made public, the USD could experience a short-term rally leading up to the data on Friday as traders pare down their short positions.

This shows that these small but vital informative indicators directly or indirectly rules the trading terminal and affects the prices vigorously.

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These economic indicators are mainly helpful in top down approach followed by any investor.:)

They start their analysis with global economies including both national and international economic indicators as GDP growth rates, inflation, interest rates, exchange rates, productivity and energy prices as well.

The availability of good economic data is the major attention of international markets as they are the indicator of the countries economy which is the promising destination for foreign investors.

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Not only this the other releases like personal income, unemployment rate, housing starts, retail sales etc. which are also known as coincident indicators give an overview on future performance of the related country and its economic conditions.

These indicators are changing at the same time and in same direction as the whole economy moves, so they represent directly the current state of the economy. 🙂