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 Reserve Bank of India (RBI) chief said on Tuesday that countries that allowed exchange rates to be determined by Markets could not then use the currency as a policy tool to fight inflation.
"If the exchange rate is to be market-determined, you cannot use it as an instrument for some policy or the other," RBI Governor Y.V. Reddy said at a seminar.
Reddy was responding to a question on why many countries were not using currency appreciation to rein in inflation.
Foreign Direct Investment into India has surged to over USD 25 billion in 2007-08 and the country’s Foreign Exchange Reserve crossed USD 341 billion as of today, Ashwani Kumar, Minister of State for Commerce and Industry has said.
Addressing the two-day India Investors’ Summit organised by Financial News in association with Dow Jones and The Wall Street Journal in London, Ashwani Kumar highlighted the initiatives of the UPA government in making growth more inclusive and the emphasis laid on education and health in the context of providing skills and better quality of life.
He said the next wave would be in the skill-based manufacturing sector.
Nearly 500 delegates from business and industry registered for the event which discussed the current social, financial and economic dynamics of doing business with India.
Ashwani Kumar gave a background to the reform process in India and the key drivers of India’s growth.
To support his argument of the sustainability of GDP growth of over 8 per cent in the long run, he observed that India had the advantage of a huge young workforce (24 per cent of the population are below the age of 28 years, 54 per cent of the population are in the working group) and a very high savings and investment rate (over 35 per cent of GDP).
Domestic demand and investment are the key drivers of growth and therefore insulate the Indian Economy to a large extent from the sub-prime crisis.
Inflation, though a major concern, could be contained. The growth potential of services sector in India was enormous at USD 200 billion offering employment to 40 million people, he said.
Kumar was positive about sustainability of India’s growth saying no reform measure had been reversed even though six different government had been in office after the reform process began.
Lord Mayor of the City of London, David Lewis, who had visited India recently, was very optimistic about the growth prospects of India but felt that liberalisation of the Indian financial and legal services sectors could have been faster.
The High Commissioner of India to the UK Shiv Shanker Mukherjee and the UK minister of State for Trade and Investment, Lord Digby Jones, also addressed the gathering. The summit concluded on Tuesday.
Crude oil rose above $129 a barrel in New York for the first time after billionaire hedge-fund manager Boone Pickens said that oil will reach $150 a barrel this year.
Prices will climb because supply isn’t keeping up with demand, Pickens, the founder and chairman of Dallas-based BP Capital LLC, told CNBC today. Oil advanced on May 16 when Goldman Sachs Group Inc. boosted its estimate for the second half of the year to $141 a barrel, from $107, citing supply constraints.
``There is so much momentum in the market that it doesn’t take much for prices to reach new records,’’ said Brad Samples, commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``We rose today after Boone Pickens basically parroted the Goldman line on prices.’’
Crude oil for June delivery rose $1.82, or 1.4 percent, to $128.87 a barrel at 9:25 a.m. on the New York Mercantile Exchange. Futures reached $129.31, the highest since trading began in 1983. Prices are 98 percent higher than a year ago.
Credit Suisse Group AG and Societe Generale SA raised their oil prices forecasts for 2008 and 2009 in reports today, citing investor flows and supply limitations.
Brent crude oil for July settlement rose $2.05, or 1.6 percent, to $127.11 a barrel on London’s ICE Futures Europe exchange. The contract touched a record $127.49 today.
Oil prices also rose because the dollar weakened against the euro, prompting investors to buy commodities as a hedge against the currency’s decline. The euro gained after an adviser to the German government said European policy makers may increase interest rates as soon as the financial crisis ends.
German consumer prices rose 2.6 percent in April from a year earlier after jumping 3.3 percent the previous month, the most in 12 years. German producer-price inflation accelerated to 5.2 percent in April, the fastest in almost two years, the Federal Statistics Office said today. The European Central Bank aims to keep inflation in the euro region just below 2 percent.
``Oil is up because the dollar is being pounded on the bigger-than-expected increase in German inflation,’’ said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. ``The likelihood that the ECB will cut rates to be more in line with those in the U.S. is reduced by the German inflation numbers.’’
Agum Gupta, Head Forex, Standard Chartered Bank, believes that if crude goes above USD 130 per barrel, then sentiments will immediately take a beating and the market will run towards Rs 43 per dollar. On the other hand, he feels that if there are steady capital inflows into the country, then sentiments can change and a slightly stronger rupee in the short-term can be expected.
Excerpts from CNBC-TV18’s exclusive interview with Agum Gupta:
Q: Do you think that this Rs 42.80 resistance for the rupee will hold and should we quite firmly not cross the Rs 43 mark at least in the next couple of weeks?
A: The resistance is more like at Rs 42.93 or Rs 42.95, that’s where we traded up to on Friday. Rs 42.80 is no longer a resistance level. We expect Rs 43 to hold this week.
Q: What can turn the tide, would you say that any adverse news, for instance oil going up by a couple of dollars, can turn the table or balance completely?
A: If oil goes at about USD 130 per barrel, then definitely sentiments will immediately take a beating and the market will run towards Rs 43.
Q: What can turn the balance in favor of the rupee?
A: Capital inflows. If we start seeing some steady capital inflows in the country, then the sentiments will slightly change and we will be again looking at a slightly stronger rupee in the short-term.
Q: What’s the advice for an importer and exporter at this juncture?
A: At the moment, we look to be in this new range of Rs 42.45-42.95. So, exporters can sell close to Rs 43 and importers should buy on dips close to Rs 42.5. So, we are trading in a short-term range at the moment.
Source : MoneyControl
Nifty Outlook for coming days
The Nifty is likely to consolidate between the range of 5000 to 5200 levels in coming trading session.Market is waiting for trendline breakout.On the higher side it may face resistance around 5200.Once it breaks upperside trendline next target 5400.On the lower side it may face resistance around 5000.Once it breaks lowerside trendline next target 4800.On the downside 4800-4700levels is an immediate support
India’s rupee fell on speculation crude oil near a record high will increase demand for dollars needed to pay for the commodity.
The local currency extended a four-week decline as companies including Indian Oil Corp., the nation’s biggest refiner, stepped up dollar purchases after oil became costlier by almost 33 percent this year. Energy costs may also widen the nation’s current-account deficit as Asia’s third-largest economy ships in three-quarters of the oil it needs from overseas.
``Importers are more aggressive in buying dollars due to the rapid increase in oil,’’ said Indrajit Sengupta, a currency trader at state-owned Canara Bank in Mumbai. ``Since there is no matching dollar supply, the rupee will be under pressure in the near term.’’
The rupee declined 0.2 percent to 42.595 per dollar at the 5 p.m. close in Mumbai, from 42.5125 on May 16, according to data compiled by Bloomberg. Markets were closed yesterday for a holiday.
The value of oil imports in the 12 months through March climbed 23.5 percent to $71.8 billion from a year earlier, helping widen the trade deficit to $80.4 billion. The current- account shortfall widened to $5.4 billion in the three months ended Dec. 31 from $3.7 billion a year earlier and $4.7 billion in the preceding quarter, the central bank said on March 31.
Exporters Purchase
Crude oil traded above $127 a barrel in after-hours trading on the New York Mercantile Exchange after touching an all-time high of $127.82 on May 16.
The local currency pared losses on speculation exporters purchased the currency as it traded near a 13-month low. A weaker currency increases the income of exporters when they repatriate their earnings.
``The dollar was finding it difficult to rise beyond a point which probably prompted exporters to sell,’’ said V. Rajagopal, chief currency trader at Kotak Mahindra Bank Ltd. in Mumbai. ``That helped the rupee recover some ground.’’
The local currency fell 2.3 percent in the week through May 9, the most since 1998, and extended its decline by 2.2 percent last week, Bloomberg data show.
The Indian rupee trimmed early losses on Tuesday after a sharp slide to 13-month lows last week was seen by some investors as overdone, but the outlook remained bearish because of high oil prices.
The partially convertible rupee ended at 42.635/640 per dollar, 0.23 percent weaker than Friday’s close of 42.53/54. Markets were closed on Monday for a holiday.
The rupee hit a low of 42.92 on Friday, its weakest since mid-April 2007.
"The dollar/rupee buying by oil refiners was not sustained and some selling at higher levels by exporters and banks pushed it down," said V. Rajagopal, head of currency trading at Mumbai-based Kotak Mahindra Bank.
Oil CLc1, India’s biggest import, has surged to record highs near $128 a barrel, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.
Standard Chartered said it expected the rupee to remain weak due to slowing growth and widening trade deficit, while Goldman Sachs sees next support at 43.82. A Reuters poll showed investors have increased their short positions in the rupee and other Asian currencies.
The rupee has lost 5 percent against the dollar this month and nearly 8 percent this year, weighed down by signs of slowing growth, high oil prices and 3-1/2-year inflation Foreigners have been buyers of about $70 million of Indian stocks in May, but they have sold a net $2.7 billion so far in 2008.
Reserve Bank of India Governor Yaga Venugopal Reddy said in Singapore that countries that allowed exchange rates to be determined by markets could not then use the currency as a policy tool to fight inflation.
"If the exchange rate is to be market-determined, you cannot use it as an instrument for some policy or the other," he said.
After a brief pause, the Indian rupee on Tuesday declined by 14 paise to 42.68/69 against the greenback due to sluggish trend in Asian equity Markets.
In quite trade at the Interbank Foreign Exchange (Forex) market, the local currency resumed lower at 42.59/61 against previous close of 42.54/55 and dropped further to quote at 42.68/69 a dollar in late morning deals.
Dealers attributed fall in the rupee to bearish equity Markets, where the benchmark Sensex was down by 134 points at10.30 am.
Expectations of slow down in capital inflows due to sustained rise in inflation and rising global crude oil prices above USD 127 a barrel mainly weighed on the rupee sentiment.
The partially convertible Indian rupee fell towards 13-month lows on Tuesday on growing concerns of a deterioration in the trade deficit because of record oil prices and worries about slowing capital inflows.
At 9:35 a.m. (0405 GMT), the rupee was at 42.63/64 per dollar, nearly a quarter of a percent weaker than Friday’s close of 42.53/54 per dollar. Markets were closed on Monday for a holiday.
The rupee hit a low of 42.92 on Friday, its weakest since mid-April 2007.
"Oil is at a record and there is no signs of any relief in the near term, and outflows are a continuing worry," said Amit Garg, a currency dealer at Allahabad Bank, who expects the local unit to trade in a 42.55-42.70 band for the session.
Oil CLc1, India’s biggest import, has surged to record highs near $128 a barrel, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.
That and signs of growth slowing as inflation has risen to 3-½ year highs have pushed the rupee down 5 percent against the dollar so far this month, taking its losses to nearly 8 percent this year.
As well foreigners have sold a net $2.7 billion of stocks this year, although so far in May they have been net buyers of about $70 million of stocks.
A Reuters poll showed investors have increased their short positions in the rupee and other Asian currencies.Goldman Sachs expects the rupee to weaken further in the near term, putting next support at 43.82 per dollar.
India’s market regulator has changed the payment process for subscribing to initial public offers and rights issues.
Under the new process, the application money will remain in the bank account of the applicant till allotment is finalised, the Securities and Exchange Board of India (SEBI) said in a statement after its board meeting late on Tuesday.
Currently, the money is debited from the bank account, and based on the number of shares allotted the excess money is returned. The regulator said the new system would eliminate the refund process.
The modalities of the entire process will be worked out separately, it said.
The SEBI board also increased the minimum net worth requirement for registration as a portfolio manager to 20 million rupees from 5 million rupees.
It said existing portfolio managers with lower net worth will have to increase it to at least 10 million rupees within six months, and to the new prescribed limit in the next six months.
SEBI said portfolio managers will not be allowed to pool the resources of clients like mutual funds and must keep assets of each client separately.
Portfolio managers working on pooled basis have been given six months to convert their perations to individual basis, the statement said
Oil extended its rally on Tuesday past $127 a barrel, driven by renewed fears of supply disruption and OPEC’s reluctance to raise output at its next meeting in September.
U.S. light crude contract for June delivery rose 35 cents to $127.40 a barrel by 0155 GMT, having settled up 76 cents in New York. Prices were within sight of the intraday record of $127.82 hit on Friday.
"The market is focusing on the supply side again. The supply side risks are driving prices higher," said Gerard Burg of National Australia Bank in Melbourne.
Supply fears resulted from a global diesel boom led by China, the Middle East, South Africa and South America for diesel-fired power generators.
China, the world’s second-biggest energy user, released a total of 8,312 tonnes of refined fuel from its little-known strategic reserves to help relief efforts in quake-hit Sichuan and Gansu provinces.
The amount is less than the worst-hit province of Sichuan uses in one day, and China may be driven to import more diesel to meet peak summer demand.
State Chinese refiners have already bought 650,000 tonnes for June, near the record high of 842,000 tonnes imported for January.
Elsewhere, events shaped to put fuel supply under threat French port workers will hold a 24-hour strike at the oil port of Fos-Lavera on Tuesday in a series of protests against the privatisation of the loading activities of state-run ports.
Nigerian security forces clashed with gunmen trying to rob a bank on Monday outside the gates of a Royal Dutch Shell compound on Bonny Island, home to the Nigerian Liquefied Natural Gas facility.
Oil companies and trading sources say a recent spate of attacks and sabotage have shut in about 559,000 barrels per day of Nigerian production, about 19 percent of the installed output capacity of around 3 million bpd in the West African state.
But oil cartel OPEC said oil markets were well supplied, and blamed high prices on speculation, a weak dollar and geopolitical problems.
OPEC President Chakib Khelil said the group would not meet before its September scheduled gathering and was unlikely to boost output then.
Saudi Oil Minister Ali al-Naimi said the world’s top exporter had boosted oil output by 300,000 bpd to meet demand and compensate for other producers’ lower output.
Forecasts in a Reuters preliminary poll on U.S. petroleum inventory data due out on Wednesday called for a 600,000-barrel rise in crude stocks, a 500,000-barrel gain in gasoline stocks and a 1.3-million-barrel build in distillate stocks.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 0.7 percent to 17,308.94 as of 10:20 a.m. local time. The S&P CNX Nifty Index on the National Stock Exchange slid 0.7 percent to 5,122.25.
IL&FS Investsmart Ltd. (ILFI IN) slid 1.1 percent to 196.10. HSBC Holdings Plc plans to buy 73.2 percent of IL&FS Investsmart, an Indian brokerage, for 10.03 billion rupees ($235 million). HSBC will acquire 43.85 percent from a Mauritius-based unit of E*Trade Financial Corp. and the rest from the Indian brokerage’s founder, Infrastructure Leasing & Financial Services Ltd., for 200 rupees a share, HSBC said in a statement e-mailed from Hong Kong on May 17. HSBC will also make an offer to buy an additional 20 percent from other shareholders.
Lanco Infratech Ltd. (LANCI IN) added 0.8 percent to 533.05. The Indian builder of roads and ports is seeking to raise about $200 million from overseas private-equity funds for its real estate business, the Press Trust of India reported, citing Managing Director G. Venkatesh Babu.
Maruti Suzuki India Ltd. (MSIL IN) gained 1.1 percent to 830.50. The maker of half the cars sold in the country increased prices of its cars by as much as 18,000 rupees because of higher raw material costs, the Times of India reported, without saying where it obtained the information.
Reliance Industries Ltd. (RIL IN) slid 0.5 percent to 2,623.95. India’s largest company by market value has formed a $1 billion joint venture with New York-based Vornado Realty Trust to set up a real estate fund, the Economic Times reported yesterday, without saying where it obtained the information.
State Bank of India (SBIN IN) fell 1.4 percent to 1,683.20. The nation’s biggest bank by assets has halted advances for buying farm equipment to prevent an increase in bad loans, the Times of India reported, citing a bank circular.
Asian stocks fell for the first time in seven days, led by financial and real-estate companies, after Macquarie Group Ltd. reported profit that missed estimates and Credit Suisse Group downgraded Japanese developers.
Macquarie, Australia’s largest securities company, slumped the most in two months. Sumitomo Realty & Development Co. dropped in Tokyo after Credit Suisse said a decline in house prices may accelerate as banks curb loans. Samsung Electronics Co. led technology stocks lower after SanDisk Corp., the world’s biggest flash-memory card maker, said sales were ``soft’’ last month.
``The growth outlook for banks is still very challenging,’’ said Daphne Roth, Singapore-based vice president of equity research at ABN Amro Private Bank, which oversees $20 billion of Asian assets. ``There’s still some uncertainty over how well capital markets will do.’’
The MSCI Asia Pacific Index lost 0.7 percent to 153.27 as of 1:41 p.m. in Tokyo, snapping a six-day, 3.7 percent advance. The retreat halted a 16 percent rally in the past two months as the Federal Reserve’s bailout of U.S. banks and a surge in commodity companies restored investor confidence in stocks.
All 10 industry groups declined today. Japan’s Nikkei 225 Stock Average lost 0.9 percent to 14,140.02. China’s CSI 300 Index dropped 1.4 percent on concern the country’s deadliest earthquake in three decades will erode earnings. All other benchmark indexes in the region declined apart from the Philippines and Thailand.
U.S. financial stocks fell yesterday after Citigroup Inc. lowered its earnings forecast for Goldman Sachs Group Inc. and other U.S. brokerages, saying lower fees from trading and underwriting will reduce second-quarter bank earnings.
`Challenging’ Outlook
Macquarie tumbled 5.2 percent to A$62.68, the biggest drop since March 17, after Nicholas Moore, who takes over as chief executive officer on May 24, said the outlook is ``challenging.’’ Net income rose 1.8 percent to A$743 million ($708 million) in the six months ended March 31, missing the A$760 million median estimate of analysts surveyed by Bloomberg.
Financial companies also dropped in Australia after the nation’s central bank said it spent ``considerable time’’ discussing the case for a rate increase this month.
``This is very hawkish and the fact they considered a rate rise has given the market a fright,’’ said Sally Auld, an interest-rate strategist at Australia & New Zealand Banking Group Ltd. in Sydney.
Babcock & Brown Ltd., an Australian fund manager, fell 3.4 percent to A$15.16.
Developers Ratings
Sumitomo Realty lost 4.2 percent to 2,635 yen, while bigger rival Mitsubishi Estate Co. slipped 3.6 percent to 2,790 yen. Developers posted the biggest drop among 33 industry groups on Japan’s broader Topix index.
Credit Suisse analysts Yoji Otani and Masahiro Mochizuki yesterday cut their rating on Japan’s developers to ``underweight’’ from ``market weight.’’
Samsung, the world’s biggest computer-memory maker, declined 3 percent to 706,000 won in Seoul. Hynix Semiconductor Inc., the second-largest, dropped 3.3 percent to 29,600 won, the most since April 28.
SanDisk Chief Executive Officer Eli Harari said yesterday rising oil prices prompted consumers to tighten their budgets. SanDisk’s memory cards are used in consumer electronics such as digital cameras and media players.
Quake Losses
Sichuan Hongda Chemical Industry Co., China’s third-largest zinc producer, plunged by the daily 10 percent limit to 32.68 yuan as it resumed trading after a five-day halt. The company said the May 12 earthquake that hit China’s southwestern Sichuan province killed 74 employees and caused a loss of 387.7 million yuan ($56 million).
STX Pan Ocean Co., South Korea’s largest shipping line, led gains by dry-bulk operators after rates to transport coal, iron ore and other commodities rose to a record for a third straight day.
STX Pan Ocean advanced 7.3 percent to S$3.98 in Singapore, headed for the highest close since Oct. 30, 2007. Merrill Lynch & Co. raised its price target for the stock by 35 percent to S$5 as it increased profit forecasts. Cosco Corp. Singapore Ltd., the ship-repair and bulk-carrier unit of China’s largest shipping line, gained 2 percent to S$3.63.
The Baltic Dry Index, a measure of shipping costs for commodities, rose 2.2 percent yesterday in London due to a shortage of vessels to haul iron ore and coal.
``Shipping lines are rallying as they’re an indirect play on the commodity cycle,’’ said Leslie Phang, Singapore-based head of private client investments at Schroders Plc, which manages $275 billion. ``There may be legs to this rally as they have more pricing power.’’
A measure of raw-materials producers has advanced 29 percent since this year’s low on Jan. 22, the most among MSCI’s Asian 10 industry groups, while energy stocks climbed 28 percent on speculation Chinese and Indian demand for metals and fuel will rise.
Throughout your investing career, it is likely that you will be guilty of committing a lot of mistakes. There is no one today who has not committed costly financial mistakes including the legendary Warren Buffet. However it is the ability to recognize and learn from your mistakes that will determine whether you are able to achieve your investment objectives. It is thus paramount to commit as few mistakes as possible. Failure is often the best teacher provided you allow yourself to be taught.
This is the time to take stock of what you actually have. The first step is to understand the various investments in your portfolio and how they fit within the overall scheme of things.
Most people would like to see their investments grow right from day one. For a long term investor, it should not matter if prices do not rise right away. Infact if investment values indeed go down, you should be happy to see your buying happening at lower levels. Eventually when the market recovers, you are bound to get much higher returns because of these inefficiencies in a turbulent market. The only time your stock prices should be up is when you need to sell.
Currently one sees lower volumes in the market due to fear and several other factors. The increase in STT (securities transaction tax) and short term capital gains tax also has had some impact on volumes. There is a lack of clarity on the direction of the market. However just because this is the case, there is no need to change your investment strategy. Continue to buy in a staggered fashion and just stay put if you already have.
Source : Moneycontrol
India’s rupee fell on speculation crude oil near a record will increase demand for dollars needed to pay for the commodity.
The Indian rupee fell on Tuesday heading towards new 13-month lows with weak Asian stocks seen dampening foreign appetite for local stocks and renewed dollar buying by oil refiners to meet their month-end needs.
* At 9:14 a.m. (0344 GMT), the partially convertible rupee was at 42.62/63 per dollar, weaker than Friday’s close of 42.53/54 and a low of 42.92, which was its weakest since April 12, 2007, according to Reuters data. Markets were closed on Monday for a holiday.
* Asian stocks edged lower on Tuesday, snapping a six-day rising trend, weighed by retailers as oil continued a relentless rise, keeping inflation fears high.
* Oil CLc1, India’s biggest import, hit record highs above $127 a barrel on Friday, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.
The rupee declined 0.3 percent to 42.635 per dollar as of 9:04 a.m. in Mumbai, from 42.5125 on May 16, according to data compiled by Bloomberg. Markets were closed yesterday for a holiday.
