The market is on fire with the Nifty hitting 8325.10 and 27884.62. Currently, the Sensex is up 527.46 points or 1.3 percent at 27884.62 and the Nifty is up 156.60 points or 1.9 percent at 8325.10. About 1764 shares have advanced, 1132 shares declined, and 126 shares are unchanged.
Friday, 31 October 2014
Gold, silver tumble to four-year lows as dollar rallies
Gold and silver slumped to their lowest since 2010 on Friday, as robust US economic data and a stronger dollar pressured prices, with stop-loss orders accelerating the metals' decline.
Gold and silver were hit hard after the dollar rose to a near four-week high against a basket of major currencies on Friday. The greenback got a boost from strong US gross domestic product data and the Bank of Japan's surprise move to expand its massive monetary easing that weakened the yen.
The metals were already facing some heat after the US Federal Reserve earlier in the week largely dismissed financial market volatility, a slowdown in Europe and a weak inflation outlook as factors that might undercut progress towards its unemployment and inflation goals.
"We hold a bearish view on gold, considering a recovering US economy and expectations of higher rates," said Chen Min, a precious metals analyst at Jinrui Futures in Shenzhen. "In the long term, we believe gold is likely to break closer to $1,000."
Silver fell nearly 3 per cent to $15.94 on Friday - its lowest since February 2010. It was poised for a fourth monthly drop in a row.
Reflecting bearish sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.16 per cent to 741.20 tonnes on Thursday, a six-year low.
NO SUPPORT FROM PHYSICAL MARKETS
Gold failed to get any support from the Asian physical markets, a factor that could likely push it to further lows. Physical demand usually provides a floor to dropping prices.
Buyers in top consumer China failed to emerge despite the drop below $1,200.
Premiums on the Shanghai Gold Exchange - the main platform for physical trades in the country - slipped on Friday to less than $1 an ounce, occasionally dropping to a discount against the global benchmark.
Premiums ranged between $1 and $2 on Thursday. The lower premiums underscore the soft appetite for gold in China after record consumption last year.
China's gold consumption tumbled 21.4 per cent year-on-year in the first nine months of the year to 754.8 tonnes, theChina Gold Association said in the statement on Friday.
Gold and silver were hit hard after the dollar rose to a near four-week high against a basket of major currencies on Friday. The greenback got a boost from strong US gross domestic product data and the Bank of Japan's surprise move to expand its massive monetary easing that weakened the yen.
The metals were already facing some heat after the US Federal Reserve earlier in the week largely dismissed financial market volatility, a slowdown in Europe and a weak inflation outlook as factors that might undercut progress towards its unemployment and inflation goals.
The hawkish comments and the strong economic data dulled gold's appeal as a hedge.
Spot gold slid over 2 per cent to $1,168.66 an ounce - its lowest since July 2010. The metal's losses accelerated after the BOJ announcement sent the dollar index soaring to fresh session highs. US gold futures also tumbled.
There were big stop loss orders below $1,180.50 an ounce - the triple bottom for gold, said a Hong Kong-based precious metals trader. That combined with the strong movement in the dollar against the yen sent gold lower, he said.
The metal is on track for a 4.7 per cent drop this week, the biggest decline since June 2013. It is also headed for a second straight monthly drop. Spot gold slid over 2 per cent to $1,168.66 an ounce - its lowest since July 2010. The metal's losses accelerated after the BOJ announcement sent the dollar index soaring to fresh session highs. US gold futures also tumbled.
There were big stop loss orders below $1,180.50 an ounce - the triple bottom for gold, said a Hong Kong-based precious metals trader. That combined with the strong movement in the dollar against the yen sent gold lower, he said.
"We hold a bearish view on gold, considering a recovering US economy and expectations of higher rates," said Chen Min, a precious metals analyst at Jinrui Futures in Shenzhen. "In the long term, we believe gold is likely to break closer to $1,000."
Silver fell nearly 3 per cent to $15.94 on Friday - its lowest since February 2010. It was poised for a fourth monthly drop in a row.
Reflecting bearish sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.16 per cent to 741.20 tonnes on Thursday, a six-year low.
NO SUPPORT FROM PHYSICAL MARKETS
Gold failed to get any support from the Asian physical markets, a factor that could likely push it to further lows. Physical demand usually provides a floor to dropping prices.
Buyers in top consumer China failed to emerge despite the drop below $1,200.
Premiums on the Shanghai Gold Exchange - the main platform for physical trades in the country - slipped on Friday to less than $1 an ounce, occasionally dropping to a discount against the global benchmark.
Premiums ranged between $1 and $2 on Thursday. The lower premiums underscore the soft appetite for gold in China after record consumption last year.
China's gold consumption tumbled 21.4 per cent year-on-year in the first nine months of the year to 754.8 tonnes, theChina Gold Association said in the statement on Friday.
RBI increases gold loan limit for UCBs to Rs 2 lakh
The Reserve Bank of India (RBI) has raised the limit for urban co-operative banks (UCBs) to sanction loan against gold collateral to Rs 2 lakh from Rs 1 lakh at present under the bullet repayment scheme.
As per the bullet repayment scheme, the UCBs are allowed to sanction loan only on conditions that the period of loan shall not exceed 1 year from the date of sanction. Interest will become due for payment along with principal only at the end of 12 months from the date of sanction. Further, banks should maintain a Loan to Value (LTV) ratio of 75 per cent on the outstanding amount on an ongoing basis, failing which the loan will be treated as a Non Performing Asset.
The RBI’s notification further stated that UCBs should take necessary and usual safeguards and formulate suitable policy for lending against gold jewellery with the approval of their boards of directors.
In another announcement, Reserve Bank also directed urban co-operative banks to strictly adhere to the requirement of using their full name along with their logo or abridged name as a brand promotion exercise. Central bank noted that UCBs efforts towards brand building do not compromise with the rule of proper disclosure to the public. Earlier, a Standing Advisory Committee in 2006 had allowed UCBs to use logo or shorter names.
IDFC demerges financial unit into bank; stock gains
IDFC was up on buying action after getting approval from board members to demerge its financial undertaking into a wholly owned step down subsidiary IDFC Bank, the company said in a filing to stock exchanges.
IDFC Bank will issue one equity share of Rs 10 each for every one share of Rs 10 each held in IDFC as a consideration for the demerger of financial undertaking.
On the completion of the demerger, equity share capital of IDFC Bank will be held approximately 53 per cent by IDFC Financial Holding, a 100 per cent subsidiary of IDFC and approximately 47 per cent by the shareholders of IDFC.
IDFC Bank will issue one equity share of Rs 10 each for every one share of Rs 10 each held in IDFC as a consideration for the demerger of financial undertaking.
On the completion of the demerger, equity share capital of IDFC Bank will be held approximately 53 per cent by IDFC Financial Holding, a 100 per cent subsidiary of IDFC and approximately 47 per cent by the shareholders of IDFC.
OMCs' under-recoveries dipped 16% in first half current fiscal
Underrecoveries of oil marketing companies(OMCs) on subsidised sale of diesel, liquefied petroleum gas (LPG) and kerosene declined 16 per cent in the first half of the current financial year. The total underrecoveries would have been lower, had it not been for the 32 per cent jump in losses on LPG sales.
The three OMCs — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — registered losses of Rs 51,110 crore between April and September against Rs 60,656 crore in the year-ago period. While LPG losses increased to Rs 24,597 crore from Rs 18,585 crore, diesel underrecoveries dipped about 60 per cent to Rs 11,656 crore from Rs 28,014 crore. Losses on kerosene sales remained flat at Rs 14,857 crore.
The worrisome increase in LPG losses was because of two factors — an 11 per cent rise in consumption (80 per cent of which is subsidised) coupled with near-stagnant retail prices. At the current rate of reduction, OMCs’ gross underrecoveries are seen coming down from Rs 1,39,869 crore in FY14 to Rs 1.17 lakh-crore in FY15 — much higher than the government’s estimate of Rs 75,000 crore.
The three sensitive products account for 60 per cent of the total consumption of petroleum products. Consumption of these grew three per cent to 46.4 million tonnes (mt) in the first half of the current financial year from 45.1 mt in the corresponding period in FY14. LPG consumption grew 11 per cent to 8.56 mt between April and September this year and 16 per cent in September alone.
The prices of subsidised LPG have been revised only twice in two years, that too on account of an increase in dealer commission. The twin revisions have led to a mere 3.7 per cent rise in the price from Rs 399 a cylinder in July 2012 to Rs 414 a cylinder at present. This has led to ballooning of underrecoveries, despite the overall decline in global crude oil prices.
Subsidised LPG accounted for 24 per cent, or Rs 39,558 crore, of total underrecoveries of Rs 1.61 lakh-crore of OMCs on the sale of three sensitive products in FY13. The share rose to 33 per cent in FY14 and further to 47 per cent of the total underrecoveries in the first half of the current financial year. Unlike LPG, diesel’s share in total losses has witnessed a sharp decline from 57 per cent in 2012-13 to 44 per cent in FY14 thanks to a monthly price hike of 50 paise a litre since January 2010. The share dropped to 23 per cent in the first half of the current financial year.
With global crude prices having declined from a peak of $116 per barrel in June to less than $87 per barrel now, analysts estimate gross under-recoveries of OMCs to land between Rs 70,000 crore and Rs 80,000 crore in the current financial year. This would translate into a more than 26% reduction in the government's petroleum subsidy burden that stood at Rs 65,000 crore last fiscal.
The three OMCs — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — registered losses of Rs 51,110 crore between April and September against Rs 60,656 crore in the year-ago period. While LPG losses increased to Rs 24,597 crore from Rs 18,585 crore, diesel underrecoveries dipped about 60 per cent to Rs 11,656 crore from Rs 28,014 crore. Losses on kerosene sales remained flat at Rs 14,857 crore.
The worrisome increase in LPG losses was because of two factors — an 11 per cent rise in consumption (80 per cent of which is subsidised) coupled with near-stagnant retail prices. At the current rate of reduction, OMCs’ gross underrecoveries are seen coming down from Rs 1,39,869 crore in FY14 to Rs 1.17 lakh-crore in FY15 — much higher than the government’s estimate of Rs 75,000 crore.
The three sensitive products account for 60 per cent of the total consumption of petroleum products. Consumption of these grew three per cent to 46.4 million tonnes (mt) in the first half of the current financial year from 45.1 mt in the corresponding period in FY14. LPG consumption grew 11 per cent to 8.56 mt between April and September this year and 16 per cent in September alone.
The prices of subsidised LPG have been revised only twice in two years, that too on account of an increase in dealer commission. The twin revisions have led to a mere 3.7 per cent rise in the price from Rs 399 a cylinder in July 2012 to Rs 414 a cylinder at present. This has led to ballooning of underrecoveries, despite the overall decline in global crude oil prices.
Subsidised LPG accounted for 24 per cent, or Rs 39,558 crore, of total underrecoveries of Rs 1.61 lakh-crore of OMCs on the sale of three sensitive products in FY13. The share rose to 33 per cent in FY14 and further to 47 per cent of the total underrecoveries in the first half of the current financial year. Unlike LPG, diesel’s share in total losses has witnessed a sharp decline from 57 per cent in 2012-13 to 44 per cent in FY14 thanks to a monthly price hike of 50 paise a litre since January 2010. The share dropped to 23 per cent in the first half of the current financial year.
With global crude prices having declined from a peak of $116 per barrel in June to less than $87 per barrel now, analysts estimate gross under-recoveries of OMCs to land between Rs 70,000 crore and Rs 80,000 crore in the current financial year. This would translate into a more than 26% reduction in the government's petroleum subsidy burden that stood at Rs 65,000 crore last fiscal.
Bata India opens its largest store in Bandra
In a bid to continue to increase its retail presence, Bata India has opened its largest store in Bandra at Hill Road, Mumbai. Trading from 9,000 square feet area and spread across 3 floors, the new store offers customers an international shopping experience.
The store showcases Bata’s new-extensive product offering in the newly introduced city format. Customers can choose from an extensive range of the retailer's latest collection across footwear for women, men, children, as well as a special edit of exclusive accessories.
Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization. The company manufactures footwear for men, women and children. The company manufactures shoes of various quality such as leather, rubber, canvas and PVC shoes.
Record opening: Nifty hits 8200, Sensex strong; Bharti up
Bhart Airtel, Infosys, ONGC, Cipla and Maruti are top gainers while Hindalco, HUL and Tata Motors are among the losers.
The market starts November series on a stellar note. The Nifty hit 8200 for the first time, up 32.15 points while the Sensex is up 92.73 points at 27439.06. About 499 shares have advanced, 91 shares declined, and 15 shares are unchanged. Bhart Airtel, Infosys, ONGC, Cipla and Maruti are top gainers while Hindalco, HUL and Tata Motors are among the losers. Asian stocks rose on the final trading day of the week following positive US data overnight, with focus on developments in Japan. US stocks jumped on Thursday with the Dow leading gains by over 1 percent following strong data releases. Third-quarter gross-domestic product (GDP) rose 3.5 percent, beating expectations, while a separate report showed that the underlying trend for first time weekly jobless claims is at its lowest level since 2000. Brent crude was marginally lower as traders saw little chance of OPEC cutting output at its November meeting. From precious metals space, gold traded around USD 1200 an ounce its lowest level in nearly 4 weeks. Asian stocks rose on the final trading day of the week following positive US data overnight, with focus on developments in Japan.
The market starts November series on a stellar note. The Nifty hit 8200 for the first time, up 32.15 points while the Sensex is up 92.73 points at 27439.06. About 499 shares have advanced, 91 shares declined, and 15 shares are unchanged. Bhart Airtel, Infosys, ONGC, Cipla and Maruti are top gainers while Hindalco, HUL and Tata Motors are among the losers. Asian stocks rose on the final trading day of the week following positive US data overnight, with focus on developments in Japan. US stocks jumped on Thursday with the Dow leading gains by over 1 percent following strong data releases. Third-quarter gross-domestic product (GDP) rose 3.5 percent, beating expectations, while a separate report showed that the underlying trend for first time weekly jobless claims is at its lowest level since 2000. Brent crude was marginally lower as traders saw little chance of OPEC cutting output at its November meeting. From precious metals space, gold traded around USD 1200 an ounce its lowest level in nearly 4 weeks. Asian stocks rose on the final trading day of the week following positive US data overnight, with focus on developments in Japan.
Pre-market: Nifty seen opening higher; may hit fresh record highs
The 50-share Nifty index is expected to open higher on Friday following positive trend seen in other Asian markets. Tracking the momentum, the index is expected to surpass its previous record high of 8181.55 made on Thursday.
At 07:30 a.m., Nifty India stock futures in Singapore were trading 55 points lower at 8,249 indicating a gap-up opening on the domestic market.
The benchmark indices ended at all-time closing highs led by gains in technology, oil & gas, banks and realty sectors even as the US ended its Quantitative Easing program on Thursday.
The 50-share Nifty closed 78 points higher at 8169.20 and Sensex ended 248 points higher at 27346.33 in the previous session.
"Nifty cleared the resistance of 8,100 and moved higher to form a new high of 8,181. If the present momentum spills over to next few days then it may move higher towards 8,200 - 8,240 range which is the next resistance to watch out for," GEPL Capital said in a report.
South Korea's Kospi index was trading 0.24 per cent higher at 1,963 and China's Shanghai index was trading 0.24 per cent higher at 2,396
At 07:30 a.m., Nifty India stock futures in Singapore were trading 55 points lower at 8,249 indicating a gap-up opening on the domestic market.
The benchmark indices ended at all-time closing highs led by gains in technology, oil & gas, banks and realty sectors even as the US ended its Quantitative Easing program on Thursday.
The 50-share Nifty closed 78 points higher at 8169.20 and Sensex ended 248 points higher at 27346.33 in the previous session.
"Nifty cleared the resistance of 8,100 and moved higher to form a new high of 8,181. If the present momentum spills over to next few days then it may move higher towards 8,200 - 8,240 range which is the next resistance to watch out for," GEPL Capital said in a report.
The level of 8,130 has now emerged as an immediate support and the bias would turn negative for short term only if Nifty breaches 8,130. A breach of 8,130 may drag it down to 8,060," added the report.
According to analysts, the market is in bull-grip and the momentum is likely to take Nifty to 8,300 in November series itself.
Overnight, U.S. stocks ended higher boosted by a strong reading on quarterly economic growth and by another round of upbeat earnings reports including Visa, which accounted for nearly 140 points in the Dow industrials.
Gross domestic product grew at a 3.5 percent annual rate in the third quarter, beating expectations," Reutrs reported.
"A separate report showed first-time applications for unemployment benefits rose marginally last week, but a measure of underlying trends hit its lowest level since May 2000 in a show of labor market strength," added the report.
The Dow Jones industrial average rose 221.11 points, or 1.3 per cent, to 17,195.42, the S&P 500 gained 12.35 points, or 0.62 per cent, to 1,994.65 and the Nasdaq Composite added 16.91 points, or 0.37 per cent, to 4,566.14.
Asian shares were trading higher. Japan's Nikkei 225 index which was trading 1.7 per cent higher at 15,930 and Hong Kong's Hang Seng index was trading 0.80 per cent higher at 23,889. Gross domestic product grew at a 3.5 percent annual rate in the third quarter, beating expectations," Reutrs reported.
"A separate report showed first-time applications for unemployment benefits rose marginally last week, but a measure of underlying trends hit its lowest level since May 2000 in a show of labor market strength," added the report.
The Dow Jones industrial average rose 221.11 points, or 1.3 per cent, to 17,195.42, the S&P 500 gained 12.35 points, or 0.62 per cent, to 1,994.65 and the Nasdaq Composite added 16.91 points, or 0.37 per cent, to 4,566.14.
South Korea's Kospi index was trading 0.24 per cent higher at 1,963 and China's Shanghai index was trading 0.24 per cent higher at 2,396
US markets gain on encouraging GDP data
The US markets closed higher on Thursday, as report showed faster-than-estimated growth in gross domestic product, fueling speculation that economy is strong enough to withstand higher interest rates. The US economy grew by a 3.5% annual rate in the third quarter, fueled by a surge in exports and the biggest jump in federal spending in five years. Although growth slowed from a 4.6% pace in the spring, the economy continued to show solid if unspectacular improvement during the period stretching from July through September. Consumers spent at a moderate 1.8% pace, businesses’ invested at a steady clip and government is no longer a major drag on the economy. What’s more, the US is adding jobs at the fastest rate since the recession ended in 2009 and consumers are feeling the most confidence in seven years, buoyed by a rising stock market and falling gasoline prices.
Meanwhile, applications for US unemployment benefits rose slightly in late October, but the level of jobless claims continued to point to an improving labor market in which companies are holding onto the workers they already have while slowly beefing up their staffs. Initial jobless claims climbed by 3,000 to 287,000 in the week ended October 25. Claims have been under the key 300,000 benchmark for seven straight weeks for the first time since the recession ended. The average of new claims over the past month, meanwhile, dipped by 250 and stood at 281,000. The four-week average reduces seasonal volatility in the weekly report and is seen as a more accurate barometer of labor-market trends.
Dow Jones Industrial Average added 221.11 points or 1.30 percent to 17,195.42, Nasdaq was up by 16.91 points or 0.37 percent to 4,566.14, while S&P 500 ended higher by 12.35 points or 0.62 percent to 1,994.65.
The Indian ADRs closed mostly in green on Thursday; Infosys was up by 1.24%, HDFC Bank was up by 0.40%, Wipro was up 0.22% and Dr. Reddy’s Lab was up 0.21%. On the other hand, Tata Motors was down 0.10%.
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