Gold is still bounded in sideway consolidation in tight range for the moment and intraday bias remains neutral. With 1119.2 support intact, another rise could still be seen and above 1163 will bring stronger rebound into 1169.3/1227.5 resistance zone. However, upside should be limited there and bring another fall to continue to consolidation pattern from 1227.5. On the downside, below 1119.2 will suggest that recovery from 1075.2 has completed already and will flip intraday bias back to the downside for 1075.2 and below.
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Considering that weekly MACD is staying below signal line, consolidation from 1227.5 is expected to extend further, either in form of sideway consolidation or a deeper pull back to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But after all, downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER
At this point, silver is still limited below mentioned 18.925 resistance and sideway consolidations could still continue. But after all, with 18.055 support intact, rise from 16.675 is still expected to continue. Break of 18.925 will bring rally resumption towards 19.05 high next. On the downside, though, break of 18.055 support will indicate that rise from 16.765 has possibly completed and will flip intraday bias back to the downside for retesting this support first.
In the bigger picture, medium term rise from 12.435 could still be in progress and another high above 19.50 cannot be ruled out. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall. So, we'll continue to look for reversal signal on next rise. On the downside, break of 16.765 support will revive the case that silver has topped out in medium term and will bring deeper decline towards lower medium term trend line at 14 level.
Key benchmark indices ended a choppy trading session lower as weak global stocks weighed on investor sentiment. The BSE 30-share Sensex was down provisionally down 27.66 points or 0.16%, off close to 130 points from the day's high and up close to 35 points from the day's low. Realty, health care, PSU, FMCG, oil exploration and PSU OMCs stocks fell. But metal stocks rose. The market breadth was weak.
The market was volatile. Stocks surged at the onset of the trading session tracking overnight rally in US stocks. It pared gains later. The market came off the lower level later in mid-morning trade. The market regained positive terrain after slipping into the red for a brief period in early afternoon trade. The market moved between positive and negative zone later. It slumped to hit fresh intraday low in mid-afternoon trade. The market cut losses later in volatile trade.
Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said.
Food prices will cool off in 1-2 months and inflation will turn around, finance ministry's chief economic advisor Kaushik Basu said in a newspaper interview published on Wednesday. The Reserve Bank of India will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank. Food prices rose near 20% in December from a year earlier, their highest in 11 years.
Monthly inflation may touch double digits by March 2010, Chief Statistician Pronab Sen told Television media on Tuesday. The wholesale price index rose to 7.31% in December from a year earlier, driven by higher food prices.
Economic growth will accelerate this year, Commerce and Industry Minister Anand Sharma said on Tuesday as he demanded better access to China's markets to help exports. Sharma's call for greater access for goods comes amid a widening trade gap between the two countries. Trade between the two grew rapidly to $50 billion in 2008, making China India's second-largest trading partner, but fell back to $43 billion in 2009 as global trade declined. Sharma called for more Chinese direct investment in India, especially in infrastructure, while noting that Indian firms are already present in China.
The Reserve Bank of India (RBI) on Tuesday allowed the introduction of currency futures in euro, yen and pound sterling, a move would improve liquidity in the derivatives market.
Meanwhile, the initial public offer (IPO) of fast-food chain Jubilant Foodworks was subscribed 22.94 times by 15:00 IST today. The company has fixed IPO price band of Rs 135-Rs 145 per share. Today is the last day of bidding for the IPO
European shares fell on Wednesday on mounting concerns about bank lending restrictions in China. The key benchmark indices in Germany, France and UK fell by between 0.33% to 0.48%
Most Asian markets ended lower Wednesday, as concerns China may step up its tightening measures to cool a rapidly growing economy hit banking and resource shares hard. The key benchmark indices in Singapore, Japan, Taiwan, China, Hong Kong fell by between 0.25% to 2.93%. The Shanghai Composite index was the biggest loser in the region with a near 3% fall. But, key benchmark indices in South Korea and Indonesia rose by between 0.04% to 0.24%.
China's banking regulator said the nation's banks were expected to make fewer loans this year than in 2009. China's top banking regulator Liu Mingkang said Chinese banks were expected to issue about 7.5 trillion yuan ($1.1 trillion) in new loans in 2010 compared to 9.59 trillion yuan in 2009, reflecting efforts to rein in bank lending which nearly doubled last year
US index futures fell as Republican Scott Brown's Massachusetts Senate seat election victory raised concerns over the political and economic outlook in the US. Trading in US index futures indicated the Dow could fall 26 points at the opening bell on Wednesday, 20 January 2010. Brown's victory is seen as dealing a blow to President Barack Obama's legislative plan, including any further needed stimulus down the road, as the Democrats would no longer have 60 seats in Senate, which is needed to block filibusters and get bills enacted.
After an extended weekend, US stocks opened the week on an encouraging note on Tuesday 19 January 2010. Stocks rose to fresh 15-month highs led by healthcare stocks as a key senate-seat vote in Massachusetts on Wednesday could change the course of healthcare reforms. Technology stocks got a boost from anticipation of strong earnings from IBM. IBM's results which were out after the bell were well ahead of expectations. In other earnings, Citigroup hit its earnings target but missed on revenue.
The Dow gained 115.78 points, or 1.1%, to 10,725.43. The Standard & Poor's 500 index added 14.20 points, or 1.3%, to 1,150.23. The Nasdaq composite index rose 32.41 points, or 1.4%, to 2,320.40 on Tuesday.
The world's economy is recovering more strongly than expected and the projected growth rate in 2010 is likely to beat the forecast 3%, Dominique Strauss-Kahn, the head of the International Monetary Fund, said on Wednesday. But he said the recovery was patchy and various regions were rebounding at a varying pace.
Unemployment rates will likely peak in most US cities in 2010, but it will be many more years before jobless rates hit their lows of the last decade, a report released by a US mayors group shows. In some areas, such as California's central valley and cities in Nevada, unemployment rates will stay at or above 10% through 2013, according to the report published on Wednesday by the US Conference of Mayors and research group Global Insight. The mayors group released the report a day ahead of a meeting with US President Barack Obama in which it will seek federal financial aid for small and large cities.
Closer home, as per provisional figures, the BSE 30-share Sensex was down 27.66 points or 0.16% to 17,458.40. At the day's high of 17,590.59, the Sensex rose 104.53 points at the onset of the trading session. The Sensex fell 61.01 points at the day's low of 17,425.05 in mid- afternoon trade.
The S&P CNX Nifty was down 5.10 points or 0.1% to 5220.55 as per provisional figures.
The market breadth, indicating the overall health of the market, was weak. The breadth was strong earlier in the day. On BSE, 1762 shares declined compared with 1134 that advanced.
The BSE Mid-Cap index fell 0.37% and the BSE Small-Cap index fell 0.03%.
Among the 30-member Sensex pack, 12 rose while the rest fell
BSE clocked a turnover of Rs 6157 crore, lower than Rs 6376.80 crore on Tuesday, 19 January 2010.
India's largest mortgage lender by total income HDFC rose 0.55% as net profit jumped 22.75% to Rs 671.25 crore in Q3 December 2009 over Q3 December 2008. The results were announced during market hours today.
Index heavyweight Reliance Industries (RIL) fell 0.76%. RIL last week raised $763 million through a block sale of 3.3 crore shares. RIL, which is bidding for bankrupt LyondellBasell Industries, had previously sold treasury shares to state-owned insurer Life Insurance Corp of India raising $577 million. As per reports last week, RIL had sweetened its offer to buy a controlling stake that valued LyondellBasell at $13.5 billion. RIL will announce its Q3 result on Friday, 22 January 2010.
State-run oil marketing stocks declined on reports the Government has no plans to raise fuel prices as of now. HPCL (down 3.76%), BPCL (down 4.7%), and Indian Oil Corporation (down 2.15%), edged lower.
With global crude prices hovering near $80 per barrel a hike in crude oil price was imminent, reports added. Accordingly, the matter is to be considered next month, based on the recommendations of Kirit Parikh Committee.
Meanwhile, the government has announced Rs 12,000 crore in cash as compensation for the losses incurred by oil-refining companies. But the compensation was insufficient to offset the loss on the sale of subsidized cooking gas and kerosene alone for April-December last year.
Oil exploration stocks declined on decline in crude oil prices. Oil India (down 0.83%), ONGC (down 3.09%), and Cairn India (down 0.91%), slipped.
Fall in crude oil prices will result in lower realisation from crude sales for oil exploration firms. Crude oil for February 2010 delivery fell as much as 65 cents, or 0.8%, to $78.37 a barrel on concerns China may step up efforts to curb credit growth
Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.35% on Tuesday, 20 January 2010. Steel Authority of India, Hindalco Industries, Jindal Steel & Power, rose by between 1.39% to 1.93%.
Tata Steel, the world's eighth-largest steelmaker rose 2.08%. The company said on 5 January 2010 sales from its Indian operations rose 73% in December 2009 to 636,000 tonnes from a year earlier. The Indian operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker
But, JSW Steel fell 0.68%. The company today reported net profit of Rs 54.23 crore in Q3 December 2009 compared to a net loss of Rs 127.50 crore in Q3 December 2008.
India's third largest software services exporter Wipro dipped 1.73% on profit booking after hitting s 52-week high of Rs 753 in intra-day trade today. The company's consolidated net profit rose 21.26% to Rs 1217.40 crore on 4.17% rise in total income to Rs 7055.80 crore in Q3 December 2009 over Q3 December 2008. The company announced the results before trading hours today, 20 January 2010.
Rate sensitive realty stocks fell on reports the finance ministry has rejected a proposal by the Department of Industrial Policy and Promotion (DIPP) that had suggested dropping the mandatory three-year lock-in for foreign direct investment in the real estate sector, affecting the prospects of the sector raising funds from overseas.
Unitech, Omaxe, Indiabulls Real Estate, Phoenix Mills fell by between 0.46% to 2.87%.
India's largest realty player by market capitalization DLF fell 1.76%. DLF has reportedly decided to exit from its mutual fund venture, DLF Pramerica Mutual Fund, by selling its entire stake to the overseas partner in the venture, the US-based Prudential Financial, as the company seeks to focus on its core business. Prudential Financial (PFI) is expected to buy DLF's 39% stake in the asset management company that is yet to start operations.
India's largest drugmaker by sales Ranbaxy Laboratories fell 1.95%. The company on Tuesday signed an agreement to acquire product rights and manufacturing facility of Bangalore-based Biovel Lifesciences, for an undisclosed sum.
Among other healthcare stocks, Piramal HealthCare, Biocon, Sun Pharmaceutical Industries fell by between 0.53% to 3.2%.
Dr Reddy's Laboratories rose 2.32% as net profit rose 62.45% to Rs 168.42 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours today.
FMCG stocks fell on profit taking. ITC, Dabur India, United Spirits, Tata Tea fell by between 0.76% to 1.01%.
Some PSU stocks fell on profit taking. State Trading Corporation of India, MTNL, Bharat Electronics, Chennai Petroleum Corporation, Power Finance Corporation fell by between 0.17% to 5.07%.
TVS Motor Company roe 1.29% after it reported net profit of Rs 23.53 crore in Q3 December 2009 compared to a net loss of Rs 0.95 crore in Q3 December 2008.
DCM Shriram Consolidated rose 2.14%, after net profit jumped 300.44% to Rs 36.24 crore in Q3 December 2009 over Q3 December 2008.
Praj Industries tumbled 5.87%, after net profit dropped 38.37% to Rs 29.15 crore in Q3 December 2009 over Q3 December 2008
Kirloskar Brothers gained 1.23%, after net profit spurted 2541.56% to Rs 20.34 crore in Q3 December 2009 over Q3 December 2008.
DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.
20THJAN2010
