Oil at 18-month low on weaker demand outlook

Oil fell to an 18-month low below $89 a barrel on Friday and was heading for its biggest

Weekly loss in about a year as reports suggesting slowing economic growth around the globe signaled weaker demand, while supply is ample. A downgrade of the credit ratings of 15 of the world's biggest banks by ratings agency Moody’s to reflect the risk of losses they face from volatile capital markets activities also weighed on commodities and equities.

"Manufacturing is a key indicator of oil demand, and based on the data coming out of the United States it doesn't look good, even though prices have been coming off," said Ben Le Brun, a Sydney-based market analyst at Options press. "Prices are a little bit higher this morning, because of some short-covering by bargain price hunters."

Brent crude was up 18 cents to $89.41 barrel by 0810 GMT, after faling to $88.49, the

Lowest since December 2010, earlier in the session. U.S. crude was down 14 cents at $78.06, after a 4 percent drop on Thursday. The price of Brent has fallen more than 8 percent this week, in its biggest weekly drop since the middle of last year. It has dropped 30 percent from its 2012 high reached in March of $128.40. Reports this week showed U.S. factory output grew at its slowest pace in 11 months in June, business activity across the euro zone shrank for a fifth straight month and Chinese

manufacturing contracted for an eighth month running.

The leaders of Germany, France, Italy and Spain will meet in Rome later in the day in an

Attempt to restore confidence in the euro zone ahead of an EU summit in Brussels next week.Friday's meeting will look for ways to achieve fiscal and banking union in the euro zone And, more urgently, it may also be the occasion for Spain to formally request assistance of up to 100 billion euros for its struggling banks. As the economic outlook darkens, oil supply is ample. The Organization of the Petroleum Exporting Countries is pumping about 1.6 million barrels per day (bpd) more than the demand for its oil and its own supply target, according to OPEC figures.

RCap gets SEBI, Singapore approval for AMC stake sale

Reliance Capital today said it has got approval from the Indian market regulator SEBI and the Monetary Authority of Singapore (MAS) for Rs 1,450-crore stake sale in its mutual fund business unit to Japan's Nippon Life.

Anil Ambani-led Reliance Group's financial services arm Reliance Capital (RCAP is selling 26% stake in Reliance Capital Asset Management Co (RCAM), which runs India's most profitable mutual fund, to the Japanese firm.

In a statement issued today, Reliance Cap said that it has received approval from Sebi, as also MAS, for the deal.

RCAP has operations in Singapore as well, because of which the transaction required MAS approval.

Commenting on the development, Reliance Capital CEO Sam Ghosh said: "We are delighted to get these approvals, and are thankful to the regulators for their support."

The deal was approved by the Reserve Bank of India (RBI) last week, which it has also got the clearance from Competition Commission of India and the Pension Fund Regulatory and Development Authority (PFRDA).

The definitive agreement for the deal, the largest ever Foreign Direct Investment (FDI) in the Indian mutual fund space, was signed between Reliance Cap and Nippon Life in late March this year.

The transaction is expected to close in next few weeks.

The Nippon Life transaction values RCAM, the country's most profitable fund house, at about Rs 5,600 crore.

Reliance Capital has already completed another deal with Nippon Life, wherein the Japanese financial services giant has acquired 26 per cent stake in Reliance Life Insurance for Rs 3,100 crore, valuing the life insurance venture at about Rs 11,500 crore.

For the last fiscal ended March 31, 2012, RCAM posted a net profit of Rs 276 crore, retaining its position as the country's most profitable fund house for the second year.

The company's profit after tax grew by over five per cent from Rs 261 crore in the previous fiscal 2011-12. Its profit before tax also grew by 5% to Rs 308 crore in the fiscal ended March 31, 2012.

Reliance Capital AMC (Asset Management Company) had overtaken HDFC AMC as the country's most profitable fund house during the previous fiscal 2010-11 and has managed to retain its leadership position.

Reliance Capital Asset Management managed Rs 1,40,853 crore (USD 27.5 billion) as on March 31, 2012, across mutual funds, pension funds, managed accounts and hedge funds.

Mas Enterprises Cardamom Auction Quotes:

As per the latest updates from the Spices Board of India, the average prices of cardamom in the auction held at Mas Enterprises, Vandanmettu on Friday (as on 1st June 2012) stood at Rs 734.41 and maximum price was at Rs 1,001.50 per kg. The arrivals and offtakes stood at 65439 kg and 55941 kg respectively.

The average price in the previous auction was Rs 715.42 per kg, meanwhile arrivals and offtakes stood at 61259 kg and 57742 kg respectively. 

For More Details Log on to- http://www.tradingresearch.in or Contact Us at- 0731-64671777

There is economic buzz in Eurozone: manufacturing PMI falls to 45.1 In may

Manufacturing activity in the 17-nation euro zone shrank at the fastest pace in three years in May, according to the Markit purchasing managers index for the sector released Friday. The index fell to 45.1 from 45.9 in April and was little changed from a preliminary estimate of 45.0. A reading of less than 50 signals a contraction in activity. The data indicates the sector is contracting at a quarterly pace of around 1%, Markit said.

For More Details Log on to- http://www.tradingresearch.in or Contact Us at- 0731-64671777

There is economic buzz in U.K. : In the may manufactacturing PMI goes at 3 year low .

The May purchasing managers index for Britains manufacturing sector released on Friday fell sharply to post a three-year low, indicating a steeper-than-expected contraction in activity. The Market/CIPS manufacturing PMI fell to 45.9 from a reading of 50.2 in April. A reading of less than 50 indicates activity shrank.

For More Details Log on to- http://www.tradingresearch.in or Contact Us at- 0731-64671777

Weekly Commodity News-

 

India gold demand may weaken as govt doubles customs duty - 19/Mar/2012 – 24/Mar/2012

India's gold demand may weaken further on account of higher import duties. India has doubled the customs duty on Gold to 4% while doubling the customs duty on Jewellery to 10%, Finance Minister Pranab Mukherjee said as part of his presentation of the Union budget. The increase in duties is seen as a move by the Finance Ministry to reduce the burgeoning fiscal deficit of the country. Various industry bodies like the ASOCHAM had advised the Indian government to implement measures to reduce India's fiscal deficit.

<<Get Free Tips>>

In the beginning of 2012, the govt had raised the import duty on gold from Rs 300/10gms to 2% of the value of imported gold and now with the doubling of customs duty on gold and jewellery, consumers may have to yet again face the prospect of higher prices and this could dissuade them to make increased purchases. India's gold imports had dropped by over 40% in Q4, 2011 due to high prices and the Bombay Bullion Association (BBA) president Prithviraj Kothari had said that Indian demand will weaken further unless prices fall. As such, the hike in excise duty could do just that- reduce Indian imports.

China crude oil imports hit record high in February amidst wide trade deficit - 19/Mar/2012 – 24/Mar/2012

Crude oil imports by China rose to 23.64 million metric tonnes in February, latest data released by the General Administration of Customs shows. China is the second largest consumer of crude oil in the world. February's increased imports are 18.5% gain over February 2011 import figures and represents its highest monthly level on record. This has however widened the trade deficit. Despite the jump in oil imports, a recent report by the International Energy Agency (IEA) notes that Chinese oil demand growth will weaken in 2012 given that the country is projected to grow less than 8% this year.

 In fact, the report says that China's share of global oil demand growth will shrink to 45% in 2012 compared to 60% in 2011. China's February trade deficit at $31.5 billion was its biggest ever since 2000 and incited fears amongst investors that the Chinese economy may have run out of steam. Since China is dependent on its exports, the huge fiscal deficit points to the country's weakening revenue stream. Considering that Europe is China's biggest export market, it should not come as a surprise that the slowdown in Euro nations has affected the Chinese as well.

Chinese copper imports to drop substantially in March and April- 19/Mar/2012 – 24/Mar/2012

China's record copper imports during the latter part of 2011 and early 2012 means that copper inventories are now at a position where it could result in lower imports. China is the biggest consumer and importer of copper.

Copper inventories monitored by Shanghai Futures Exchange are at their highest since 2003 while China's February imports were the second highest ever at 484,569 tonnes. In contrast, supplies in Europe and the US are pretty tight. As such, Layton expects copper exports from China to pick up in March and April while copper imports into China drop substantially.

Meanwhile, Chinese copper production is also showing an uptick which could further add into domestic supplies, thereby strengthening the case for lower imports. As of the data released by the National Bureau of Statistics, China produced 437,500 tonnes of refined copper in Feb 2012, up around 9.50% Year-on-Year.

Benchmark LME copper prices are currently trading at $8,500/tonne, trading up for the year but still about 15% down from the $10,000/tonne peak hit last year.

 G O L D   T E C H N I C A L  V I E W - 19/Mar/2012 – 24/Mar/2012

MCX GOLD last week faced strong resistance at 28120 level. Amid volatility was seen on account of Budget session and closed with negative bias as per weekly charts. It looks good to buy above 28120 above which 28550 is seen as immediate resistance to move towards higher levels. On lower side, if 27400 level is breached then it looks weak which may take it towards 27170 levels.

 

S T R A T E G Y

Sell MCX Gold around 28000/28100 for the targets of 28700 with stop loss of 28200.

S I L V E R    T E C H N I C A L  V I E W- 19/Mar/2012 – 24/Mar/2012

On daily charts, MCX SILVER had made a triangle pattern. A breakout with good volumes from this pattern is expected in this week which may lead it towards 59500. On higher side, 61500 can act as strong resistance. On other hand, 56500 acted as support last week and is expected to act in coming sessions as well. Any fall below this can drift silver towards 55500 and 54000.

S T R A T E G Y

Better strategy in the Mcx Silver at this point of time is to sell on highs. For the target of 55550, with stop loss of 58200.

 C R U D E   T E C H N I C A L  V I E W- 19/Mar/2012 – 24/Mar/2012

Crude Oil showed sideway movements last week where 5420 acted as strong resistance. Last week crude broke its crucial support of 5280 but unable to give closing below this level. Now if crude will break 5420 then it may find next resistance around 5500. On lower side 5220 is acting as supporting zone for it.

S T R A T E G Y

Better strategy in MCX CRUDEOIL is to buy on dips for the targets of 5500/5600.

C O P P E R   T E C H N I C A L  V I E W- 19/Mar/2012 – 24/Mar/2012

MCX COPPER has been moving in a strong channel pattern since months for which a breakout is still withheld. On daily charts copper was violated strong resistance of 435 gave closing below this level and form a reversal pattern doji. Now if it is maintain below 435 and break 431 with good volumes then next support is around 420. On higher side 440 is act as resistance. 

S T R A T E G Y

Better strategy in the MCX COPPER will be sell on highs, with the stop loss of 440 for the targets of 420.

Nifty trend for -19/Mar/2012

Markets were moved by the Budget impact and volatile movements with good volumes were observed for the whole session. Nifty future moved in the range of 150 points where it found stiff resistance at 5500. Selling pressure was seen from the level of 5450 where it slipped towards the support of 5330. Now, in the coming sessions if it sustains below 5300 then it is expected to trade around near support of 5200 while 5480 will act as strong intraday resistance.

TREND: DOWN

SUPPORT      : 5300 & 5230                

 RESISTANCE:  5400 & 5480

Major Market News-

·        Sensex ends 210 pts down post Budget; oil & gas down 3%.

·        Union Budget: Fiscal deficit target set at 5.1% of GDP in Budget 2012-13.

·        Jewellery makers shares down on gold customs duty hike.

·        ONGC declares second interim dividend of 30%.

·        BHEL pays 136% interim dividend for fiscal 2011-12.

Technical View-

BOMDYEING FUTURE HAS MADE REVERSAL PATTERN ON ITS DAILY CHARTS. HENCE, FOR THE COMING WEEK SOME SELLING IS EXPECTED.

Weekly Nifty trend for 19/Mar/2012 - 23/Mar/2012

Markets ended the eventful week on a negative note amid high volatility. On daily charts, if it breaks the trend line which is acting as support then nifty may slip towards 100 day EMA of 5190 in the coming week. However, 5460 is expected to act as stiff resistance breaching which it may move towards 5565 levels. 

Major Market News-

·        Sensex posts weekly loss of 37 points; CD, Realty, Teck fall.

·        Union Budget: Fiscal deficit target set at 5.1% of GDP in Budget 2012-13.

·        Greece would face disorderly euro exit without support: IMF.

·        Gasoline pushes up US inflation, dents confidence.

·        Government allows airlines to raise $1 billion in ECBs for a year.

·        Govt targets about $8 bn from telecoms spectrum auction

Technical View-

BOMDYEING FUTURE HAS MADE REVERSAL PATTERN ON ITS DAILY CHARTS. HENCE, FOR THE COMING WEEK SOME SELLING IS EXPECTED.

SELL BELOW 509 FOR TARGETS 490-475. MAINTAIN SL OF 530.

Nifty trend for 16/Mar/2012

Markets opened on a cautious note ahead of RBI monetary policy. There was a sudden decline after the policy announcement of keeping the rates unchanged. It breached 5400 level and made intraday low of 5397 but was able to close above 5400. Volatility is expected ahead of Union Budget hence cautious trading is recommended. 5300 will act as strong support for nifty while on higher side 5520 is seen as resistance for it.

TREND: SIDEWAYS

SUPPORT: 5370 & 5300 RESISTANCE: 5470 & 5520

Major market news-

·        Sensex ends 243 pts down on RBI's dovish note; Budget eyed.

·        Consumer durables, realty and banking were the biggest losers.

·        RBI credit policy: Central bank keeps key rates unchanged.

·        Realty, banking stocks slip over 2% on hawkish RBI stance.

·        L&T bags orders worth Rs 11.4 bn.