A Comprehensive Technical Analysis Programmes aimed to make you a Profitable Trader and achieve 100% return per annum on your Investment IN MCX & STOCK MARKET SPECIALLY IN GOLD MARKETThe rupee fell to a fresh 13-month low on Friday as record high oil prices and worries about muted capital flows into a slowing Economy increased demand for US dollars.
At 1:42 p.m., the partially convertible rupee was at 42.83 per dollar, a level it last traded on April 12, 2007, according to Reuters data. It had closed at 42.75/76 on Thursday.
The stock markets displayed volatile movements on Friday. The Sensex moved up in the opening session, surrendered gains later only to bounce back again in late deals.
The Sensex moved in a range of 17,497.36 and 17,315.52 before closing at 17,434.94, showing a net gain of 81.40 points from previous close of 17,353.54. At the day’s high, it was up by 143.82 points.
The 50-issue Nifty of the National Stock Exchange inched up 42.45 points to 5,157.70 from last close.
Capital goods segment continued to attract good buying support on a healthy infrastructure growth number announced yesterday. Banking stocks also gave support to the market. Asian markets exhibited positive trend this morning following smart rally on Wal l Street yesterday.
FIIs were net buyers to the tune of Rs 706.88 crore as per provisional figures and also picked up shares worth Rs 524.05 crore in derivatives on the same day. But concern over the inflation data to be released at noon today forced operators and retail i nvestors to book profits at higher levels. - PTI
India’s rupee declined for a fourth week on concern near-record oil prices will boost the nation’s import bill, widening its trade and current-account deficits.
The currency declined as much as 0.5 percent today to a 13- month low as demand for dollars needed to pay for crude oil increased after the commodity climbed to an all-time high of $126.98 per barrel this week. The rupee pared losses on speculation the government will ease curbs on overseas borrowings by companies, allowing more capital inflows.
``The rupee’s decline reflects concern high oil prices will increase the external deficits,’’ said Roy Paul, assistant manager of treasury at Federal Bank Ltd. in the southern Indian city of Kochi.
The rupee weakened 2.2 percent to 42.5075 a dollar this week in Mumbai, adding to last week’s 2.3 percent slide, the worst in a decade, according to data compiled by Bloomberg. It earlier dropped to 42.915, the lowest intraday level since April 12, 2007.
The currency’s 7.6 percent decline this year is the third- worst performance among the 10 most-traded Asian currencies after the South Korean won and the Thai baht.
Funds based abroad sold $2.2 billion more of Indian stocks and bonds than they bought this year, after purchasing a net $19.5 billion in 2007, according to data from the Securities and Exchange Board of India.
Crude Oil
The rupee fell 8.1 percent in the past six months as crude oil advanced 33 percent, boosting the value of India’s oil imports to a record $8.6 billion in March, government data show. Asia’s third-largest economy depends on shipments from abroad to meet three-quarters of its energy needs.
The South Asian nation’s trade deficit widened to an all- time high of $25.4 billion in the three months through December, according to the central bank. The current-account shortfall, a measure of trade and investment flows, increased to $5.4 billion in the same quarter from $4.7 billion.
The rupee rose today, cutting the week’s losses, on speculation the government will relax limits on foreign-currency borrowings by companies.
The Economic Times newspaper reported today that India will make it easier for domestic companies to borrow cheaper funds abroad after industrial production expanded at the slowest pace in six years in March. India imposed limits on such borrowings last year to slow capital inflows that helped the rupee reach an almost a decade high, threatening to erode export earnings.
Borrowing Curbs
``The rupee should halt its decline around current levels as the market waits for government measures that may boost capital flows,’’ said Mohan Shenoi, treasurer at Kotak Mahindra Bank Ltd. in Mumbai. ``It is expected that the government is going to review restrictions on external commercial borrowings.’’
India can ease restrictions on overseas borrowings among other measures to ensure stability of the financial system, the Hindu newspaper reported May 3, citing central bank Governor Yaga Venugopal Reddy.
Indian companies borrowing more than $20 million overseas can’t repatriate the proceeds, while they need the central bank’s permission to bring back funds up to $20 million, according to current government regulations.
The annual pace of growth in India’s industrial production more than halved to 3 percent in March from 8.6 percent in the previous month. The gain was the smallest since February 2002.
Source : Bloomberg
Gold edged down on Friday as resilience in the dollar hampered investor buying, although crude oil prices clawed back toward $125 a barrel.
Analysts said many investors are now focused on the oil market, resulting in a halt or even an outflow of money into non-oil commodities, in particular precious metals.
Underlining a fall in investor appetite in the gold market, gold holdings in the world’s largest exchange-traded fund (ETF) for bullion, StreetTRACKS Gold Shares, fell slightly after hitting a peak last week.
Also, gold has been stuck in an $850-$890 band this month.
"Trade is centred in the crude oil market as investors are prepared for inflation. They also buy stocks, but not the other commodities," said Yuki Sonoda, an adviser at Japanese brokerage Daiichi Commodities Co.
"The crude oil market has been consolidating after hitting a record high. But there are signs it is gaining momentum, showing a sharp contrast to the gold market," he said.
Spot gold was at $880.30/881.20 an ounce as of 0404 GMT, compared with $881.55/882.75 in late New York trade on Thursday, when it hit a high of $887.50 on a weakening dollar.
Gold held in StreetTRACKS Gold Shares fell to 589.46 tonnes this week after topping 590 tonnes earlier this month in a brief recovery from a seven-month trough of 580.46 tonnes.
Oil prices rebounded to near $125 a barrel on Friday, led by the bullish heating oil market as China and Europe scramble for barrels, thinning global supply.
US crude for June delivery was up 81 cents a barrel at $124.93, off a record near $127 marked on Tuesday.
The foreign exchange market provided little help, with the dollar stuck in a narrow range against the euro.
The euro rose to $1.5477, up 0.2 percent from late New York trade on Thursday and off last week’s peak above $1.55.
Against the yen, the dollar was little changed at 104.65 yen, having slipped from around 104.89 yen after data showed Japan’s Economy grew 0.8 percent in January-March from the previous quarter, above market expectations for a 0.6 percent increase, for an annualised increase of 3.3 percent.
The most active June gold futures contract on the COMEX division of the New York Mercantile Exchange rose $1.3 to $881.3 an ounce.
Yen-based gold futures for distant April delivery on the Tokyo Commodity Exchange rose 45 yen a gram to 2,989 yen.
Spot platinum stood at $2,062/2,080 an ounce, down from $2,079/2,094 in New York on Thursday, when it hit a one-week trough of $1,988.50.
Platinum has been supported at around $2,000 amid speculation that platinum specialist Johnson Matthey may provide a bullish outlook in an annual report on platinum group metals due next week.
Daiichi Commodities’ Sonoda said scattered buying by Japanese auto makers has propped up the white metal this month.
Palladium was at $432.50/440.50 an ounce, little changed from $432/440 in late New York. Silver was at $16.74/16.80 an ounce, against $16.70/16.76 in New York.
Oil rebounded to near $125 a barrel on Friday, led by the bullish heating oil market as China and Europe scramble for barrels, thinning global supply.
US crude for June delivery rose 67 cents to $124.79 a barrel by 0133 GMT, erasing a loss of 10 cents on Thursday’s close. The contract was 1.8 percent below the all-time peak of $126.98 a barrel achieved on Tuesday.
NYMEX June heating oil was up 0.151 cents at $3.6375 a gallon, a whisker below the record high of $3.7228 on Wednesday.
"Global supply of distillates is very tight," said Tetsu Emori, fund manager at Astmax Co Ltd in Tokyo.
Trading was volatile in New York on Thursday, driven by technical activity associated with the June crude contract options expiry. A power outage that shut the Intercontinental Exchange’s trading platform was also cited as adding to the volatility.
A bigger-than-expected rise in US natural gas stocks dulled oil prices initially. On Thursday, the US Energy Information Administration said natural gas storage rose 93 billion cubic feet last week, above expectations for an 87 bcf build.
But surging demand from developing countries, such as China, helped bolster heating oil prices. PetroChina is seen buying a third more diesel at 400,000 tonnes for June versus May’s levels, following a deadly earthquake.
Thin gas oil stocks in Northwest Europe caused by a string of refinery outages prompted players to scramble for Asian barrels.
Some support came as the dollar weakened against the euro on Thursday, after data showing US industrial production fell 0.7 percent in April, reflecting the biggest drop in the manufacturing sector since September 2005.
Oil and the US currency have become closely intertwined in recent months as investors have turned to oil as a hedge against the falling dollar.
US President George W. Bush heads for Saudi Arabia on Friday to renew his appeal to help tame record oil prices and try to shore up Arab support to contain Iran’s growing regional clout.
However, OPEC reiterated that prices had more to do with financial market volatility than fundamentals.
The oil cartel’s Monthly Oil Market Report provided more evidence that record oil prices are slowing demand growth, lowering its forecast for world demand growth to 1.16 million barrels per day, 40,000 bpd less than its previous forecast.
Investment bank UBS raised its projection for oil prices on Thursday to $115 a barrel for 2008. The forecast for this year is the most bullish among banks polled by Reuters.
India’s wholesale price index rose 7.83 percent in the 12 months to May 3, higher than previous week’s annual rise of 7.61 percent, government data showed on Friday.
The rate was above a median forecast of 7.50 percent in a Reuters poll of analysts. It was the highest since an annual reading of 7.93 percent on Nov. 6, 2004.
The annual inflation rate was 5.74 percent during the corresponding week of the previous year.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.
India’s inflation rate unexpectedly rose to the highest in 3 1/2 years, adding pressure on the central bank to raise borrowing costs further to tame prices.
Wholesale prices rose 7.83 percent in the week ended May 3 from a year earlier, after gaining 7.61 percent in the previous week, the government said today. Economists surveyed had expected a 7.55 percent increase.
Increasing borrowing costs will check the flow of money to speculators in the commodities market and rein in food prices, former central bank Governor Bimal Jalan said in parliament last month. The government, to augment monetary policy action, has persuaded steel and cement makers in the past week to cut prices and help slow inflation.
``More monetary tightening cannot be ruled out,’’ said Rajeev Malik, senior economist at JPMorgan Chase & Co. in Singapore. ``More measures are likely as inflation is expected to remain above the central bank’s target of 5.5 percent.’’
The central bank twice asked lenders to set aside more funds last month, raising the so-called cash reserve ratio to 8.25 percent, the highest since March 2001, from 7.5 percent. The Reserve Bank of India may raise the ratio for a third time this year to control inflation, according to six of nine economists surveyed by Bloomberg News on April 30.
India’s cement makers joined steel producers on May 14 in pledging to cut prices after Finance Minister Palaniappan Chidambaram said the government will take ``administrative action’’ against them for behaving like cartels.
Further Reduction
Chidambaram yesterday said there is significant scope for further reduction in cement prices. Steel Authority of India Ltd. and other Indian steelmakers on May 7 agreed to lower prices for a second time since April.
The Associated Chambers of Commerce and Industry, an Indian trade organization, says it expects the combination of steps taken by the government, central bank and companies to slow inflation to 6 percent in the next four to six weeks.
Prime Minister Manmohan Singh’s government has been stepping up measures to cool prices in Asia’s third-largest economy to improve his re-election chances in a vote that must be held before May 2009.
The government wants to bring inflation down to 4 percent, to protect consumers in a nation where the World Bank estimates half the 1.1 billion population live on less than $2 a day.
Edible Oils
Over the past two months, the government scrapped import duties on edible oils, steel products and banned the export of cement, pulses, rice, wheat and edible oil to contain prices.
Last week, under pressure from its communist allies, the government also banned futures trading in soybean oil, rubber, chick peas and potatoes to reduce speculation. It halted wheat and rice contracts last year and lentils in 2006.
Today’s inflation rate may be revised in two months when India’s government reviews the figures after receiving additional price data. The Commerce Ministry today increased the inflation rate for the week ended March 8 to 7.78 percent from 5.92 percent.
India’s rupee rose from a 13-month low on speculation the government will ease curbs on foreign- currency borrowings by companies, allowing more capital inflows.
The currency ended four days of losses after the Economic Times newspaper reported India will make it easier for domestic companies to borrow cheaper funds abroad after industrial production expanded at the slowest pace in six years in March. India imposed limits on such borrowings last year to slow capital inflows that helped the rupee reach an almost a decade high, threatening to erode export earnings.
``The rupee should halt its decline around current levels as the market waits for government measures that may boost capital flows,’’ said Mohan Shenoi, treasurer at Kotak Mahindra Bank Ltd. in Mumbai. ``It is expected that the government is going to review restrictions on external commercial borrowings.’’
The rupee rose as much as 0.4 percent to 42.555 per dollar, before trading at 42.6025 as of 11:13 a.m. in Mumbai, according to data compiled by Bloomberg, the most since May 1998. The currency is the third-worst performer among the most-traded Asian currencies this year with a 7.5 percent loss.
India can ease restrictions on overseas borrowings among other measures to ensure stability of the financial system, the Hindu newspaper reported May 3, citing central bank Governor Yaga Venugopal Reddy.
Indian companies borrowing more than $20 million overseas can’t repatriate the proceeds, while they need the central bank’s permission to bring back funds up to $20 million, according to current government regulations.
The annual pace of growth in India’s industrial production more than halved to 3 percent in March from 8.6 percent in the previous month. The gain was the smallest since February 2002.
