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Monday, 10 August 2015
REC surges after Q1 net profit rises 15% on higher income
Rural Electrification Corporation Ltd., a state-run lender to rural power projects, surged Monday after fiscal first quarter net profit rose 15% on higher interest income.
Net profit rose to Rs 14.78 billion for the three months ended Jun 30 compared to Rs 12.82 billion in the corresponding period year ago, Rural Electrification Corp said in a statement to the stock exchanges on Friday after market hours.
The rise in profits was despite a one time RBI mandated allowance against restructured loans of Rs 1.39 billion and an increase in the provisioning against standard loans to 0.30% in a phased manner.
This means that contingent allowance against standard loan assets rose to Rs 327.1 million compared to Rs 143.7 million in the same period a year ago.
Operating income rose 21.3% to Rs 56.62 billion for the quarter ended June 30, while operating expenses went up 22% to Rs 35.85 billion for the same period.
Other income of the company rose 18% to Rs 467.4 million in the Apr-Jun quarter.
At 10AM, REC rose 3.15% to Rs 275.20 on the Mumbai stock exchange. The 30-share Sensex index rose 0.44% to 28,359.04
Gold Outlook: Seen flat Mon on weak dollar, Fed rate hike fear
Gold may open flat Monday after the dollar weakened against other currencies and as United States nonfarm payrolls data suggested that Federal Reserve could hike interest rates as early as next month, said analysts.
"Gold prices will be up on weak dollar while solid US jobs data suggesting Fed rate hike fear which will cap the prices at higher level," said Ajay Kumar Kedia an analyst with Kedia Commodities.
Prices of the yellow metal will be supported by weak dollar against other currencies which boosts inventors' appetite for dollar denominated commodities, said analysts.
At 9:30AM dollar index, which measures the strength of greenback against its six major trading partners, slipped 0.20% to 97.62.
Prices of the bullion will also be supported by hope of improvement in physical demand in China and India, the world's top yellow metal consumers, said analysts.
The value of China's gold reserves dropped to $59.24 billion from $62.4 billion.
Premiums in India hovered in range of $1.30-$2.10 an ounce over the global spot benchmark up from $1.50-$2 last week, with ample supply offsetting an improvement in demand.
India's gold imports in fiscal 2015/16 are likely to be between 900 and 1,000 tonnes as lower prices will boost demand during the festive season.
However, sharp gain in the yellow metal prices will be capped as a government data showed there is continued progress in United States jobs scenario increasing the bets of interest rate hike by the Federal Reserve in September.
US nonfarm payroll data came at 215,000 in July lower than analysts' estimates of 223,000. However, the earlier month's figures were revised upward to 231,000 from 223,000 earlier.
Meanwhile, the unemployment claims held at seven-year low of 5.3% in July.
Prices of the yellow metal will also be down on subdued investment demand following sharp drop in SPDR Gold Trust holding, said analysts.
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell to 667.69 tons on Friday compared to 667.93 tons on Thursday, its lowest level since September 2008.
On Friday, gold for October delivery at the close of trades rose 0.43% to Rs 24,895 per 10 grams on the MCX.
Gold prices rose 0.02% to $ 1,094 per ounce on the Comex exchange.
On Friday, at the closing of trades Comex gold for October delivery rose 0.32% to $1,094 per ounce on weak dollar.
MCX gold prices are likely to find support at Rs 24,588 per 10 grams while resistance is seen at Rs 25,138 per 10 grams today.
Comex gold prices are likely to find support at $1,085.60 per ounce while resistance is seen at $ 1,102.10 per ounce today.
Crude may extend fall to over 4-mo low Mon on oversupply woes, weak demand
Crude oil prices are likely to slump to over four-month low in opening session Monday on increasing supplies in global markets and a disappointing data from China over the weekend showed exports tumbled in the world's second-largest economy, analysts said.
"Weak demand and rising supplies in global markets are likely to pressurise the prices of crude," said Ajay Kumar Kedia, research analyst with Kedia Commodities.
Oil-field services firm Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. rose for the third straight week. Though there are still 58% fewer rigs operating compared with October 2014, the recent rise in rigs sparked concerns that a glut will continue to weigh on the market.
US production rose to near the highest level since the 1970s in the last week, edging up to 9.5 million barrels per day, according to government data.
Crude oil may also be under pressure after a government data indicated a slowdown in the Chinese economy, analysts said.
China imports fell 8.1% in July compared to analysts' estimate of 8.1% fall and 6.1% de-growth for the same period a year earlier, data by the National Bureau Statistics of China showed.
Exports in China also declined to 8.3% for the same period compared to 2.8% growth a year ago.
West Texas Intermediate, the US benchmark, for September delivery fell 1.77% to $43.87 a barrel on the New York Mercantile Exchange Friday.
Brent, European benchmark for September contract plunged 1.70% to $49.21 per barrel, on the London-based ICE Futures Europe Exchange Friday.
Crude oil for August delivery fell 0.80% to Rs 2,824 per barrel, at the closing of trades Friday, its lowest level since Mar 19, on Multi-Commodity Exchange (MCX).
Crude oil prices for August delivery are likely to find support at Rs 2,770 per barrel and resistance at Rs 2,914 per barrel today on Multi-Commodity Exchange (MCX).
REPEAT/SUGAR WEEKLY: May trade flat on weak demand, govt sops
Sugar futures on the National Commodity and Derivatives Exchange are likely to trade flat next week after subdued demand for the sweetener from bulk consumers and as the government is likely to bring in rules to make it compulsory for sugar mills to export surplus sugar, analysts said.
"Subdued demand for the sweetener in domestic market will pressurise the prices of sugar," said Ravi Shankar Pandey, research analyst with Karvy Comtrade.
Domestic demand for the sweetener has fallen as monsoon, which usually brings cold weather, has started in many areas, traders said.
Also, total sugar supply is expected to touch 38.4 million tons in 2015-16 after accounting for 10.4 million tons of carry-over stock, from the current season, according to estimates released by Indian Sugar Mills Association (ISMA).
Meanwhile, consumption on the other hand is seen at 25.2 million tons, leaving a huge surplus of 13.2 million tons in the new season.
However, sharp fall in sugar prices may cushioned as the government is likely to bring in rules to make it compulsory for sugar mills to export surplus sugar, analysts said.
"Export of excess sugar will help to reduce the surplus output as well as to curb prices," said Abhijeet Banerjee, research analyst with Religare Commodities.
Government may make it compulsory for the sugar mills to export a fixed quantity of sugar to solve the problem of glut and ease industry's liquidity problem, reported Reuters Wednesday.
India is likely to bring in rules to make it compulsory for sugar mills to export million of tons of surplus supplies to support local price, said Reuters quoting sources.
A final decision rests with Prime Minister Narendra Modi, who discussed the politically sensitive issue at a weekend meeting with ministers, officials and sugar mill bosses, said the two government sources.
Meanwhile, mounting arrears and surplus stocks of sugar forced sugar mills to sale their produce at depressed prices which accelerate the exportable supply due to lower price.
Total cane arrear has dropped a bit due to aggressive sale by domestic mills but total arrear still stood at 181.12 billion till mid June, as per government officials.
Raw sugar October contract on the Intercontinental Exchange (ICE) slumped 2.82% to 10.85 cents per pound for the week ended Aug 6.
White sugar October contract on the London International Financial Futures and Optional Exchange (LIFFE) fell 0.72% to $346.90 per ton for the week ended Aug 6.
Sugar is expected to find support at Rs 2,150 per quintal and resistance at Rs 2,450 per quintal next week, analysts said.
Sugar for October delivery traded in Rs 2,220-2,335 per quintal range in the past five trading session on the National Commodity & Derivatives Exchange.
Base Metal Outlook: Copper seen flat Mon on demand worries, short covering
: Copper may open flat Monday on demand worries from China following weaker than expected economic data and buying at lower level after prices dropped to five-year low on Friday, said analysts.
"Base metals will fall on China demand worries while short covering will cushion the prices at lower level," said Ajay Kumar Kedia an analyst with Kedia Commodities.
Base metals will be down after a government data indicated a slowdown in the Chinese economy.
China imports fell 8.1% in July compared to analysts' estimate of 8.1% fall and 6.1% de-growth for the same period a year earlier, data by the National Bureau Statistics of China showed.
Exports in China also declined to 8.3% for the same period compared to 2.8% growth a year ago.
Prices of red metal will also be under pressure after China Jan-Jul copper, copper product imports fell 9.5% to 2.59 million tons on year, government data showed.
China is the world's largest consumer of copper accounting for about 40% of total global demand and major consumer of other industrial metals.
However, sharp fall in the red metal prices will be cushioned as investors are likely to buy back oversold position after prices dropped to five-year low on Friday, said analysts.
On Friday, copper for August delivery at the close of trades slipped 0.43% to Rs 329.70 per kilogram on the MCX, at its lowest level since July 23, 2010.
Red metal prices will also be under pressure on higher stockpiles of the metal on LME, indicating oversupply situation, said analysts.
Copper stockpiles rose by 725 tons to 352,325 tons, LME data showed on Friday, its highest level since January 2014.
On Friday, copper for August delivery at the close of trades slumped 0.43% to Rs 329.70 per kilogram on the MCX.
MCX copper prices are likely to find support at Rs 324.6 per kilograms while resistance is seen at Rs 335.2 per kilograms today.
London Metal Exchange (LME) copper prices may open at $ 5,147.50 per MT and find support at $5,043 MT and resistance at $5,271 per MT.
MCX aluminium for July delivery at close of trades dropped 0.19% to Rs 100.35 per kilograms on the MCX, at its lowest level since May 23, 2012.
MCX aluminium prices are likely to find support at Rs 99.3 per kilograms while resistance is seen at Rs 102.1 per kilograms today.
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