Technical Outlook- MCX COMMODITIES

Gold

Gold steadied on Thursday as a retreat in the dollar from 12-year highs arrested its eight-session slide, though speculation that U.S. interest rates could rise sooner rather than later kept prices under pressure. The dollar fell from a fresh high in early U.S. trading on Thursday after a surprise drop in U.S. retail sales in February. The euro is down 12 percent against the dollar this year as monetary policy at the ECB and Federal Reserve diverges, with the ECB launching quantitative easing as the Fed prepares for its first rate rise in almost a decade.

Outlook

We expect gold prices are likely to trade negative on the back of US interest rate outlook. Technical Outlook Gold Strategy S2 S1 Close R1 R2 April Sell @ R1 25400 25550 25655 25760 25880 *Investors can use S2/R2 as Stop Loss/Target depending upon the strategy advised.

 Silver

 Silver was up 0.5 percent at $15.54 an ounce.

Outlook

 We expect Silver prices are likely to trade negative on the back of US interest rate outlook.

Crude Oil

 Global oil prices fell on Thursday on estimates showing another big supply build at the delivery point for the U.S. crude contract, with trade volatile ahead of the expiry of the front-month in benchmark Brent oil. The reopening of the Houston Shipping Channel for oil imports and the possibility of higher total U.S. oil inventories stemming from a tentative deal to end a U.S. refinery strike added to the bearishness across the oil futures complex. Marine traffic in the Houston channel had been partially halted after Monday's collision between a tanker and a bulk carrier, and reopened after the removal of liquid cargo from the ship’s breached tanks. In the case of the strike, twelve refineries with a fifth of U.S. refining capacity were hit by work stoppage over the last 40 days, the largest such walkout in 35 years. Oil prices had risen earlier after the dollar's rally stalled on weak U.S. February retail sales data. Dollar-denominated commodities, such as oil, become more appealing to holders of other currencies when the greenback depreciates.

Outlook

We expect crude oil prices likely to remain volatile on concerns that falling U.S. oil rig counts may rein in a market glut.

Natural Gas

 U.S. natural gas futures fell over 3 percent on Thursday on forecasts for continued above-normal temperatures over the next two weeks despite a slightly bigger-than-expected storage draw. Traders noted that the draw was likely the last big one of the winter. The U.S. Energy Information Administration said U.S. utilities pulled 198 billion cubic feet (bcf) of gas from storage last week, more than the 191-bcf draw analysts forecast in a Reuters poll. Thomson Reuters Analytics said the latest Global Forecast System model for the lower 48 U.S. states showed the weather will cool a bit, but remain at above-normal levels over the next two weeks, with 257 heating degree days (HDD) expected.

Outlook

 We expect Natural gas prices to trade on negative note on the back of lesser cold temperature forecast for next two weeks.

Base Metals

 Copper prices hit their highest in more than a week on Thursday after upbeat lending data from China calmed fears about metals demand and triggered short-covering while a dip in the dollar also offered support. Tin slid to its lowest in over 31 months on excess supply but other prices on the London Metal Exchange gained after data showed Chinese banks extended 1.02 trillion yuan ($163 billion) of new loans in February, well above market expectations. Traders said demand for spot copper in China strengthened only marginally this week after most factories returned from near month-long Lunar New Year holidays. The second quarter is generally the strongest for consumption in China, which accounts for around 40 percent of global refined copper demand. Some bullish investors have taken heart from recent announcements of production hiccups at copper mines, but Briggs was cautious. Investors have been expecting a fall in shipments from top exporter Indonesia but Commerzbank said trade data showed they were largely steady in February compared to the same month last year. Weighing on the market was data showing aluminium stocks held at three major Japanese ports climbed for an 11th month

Outlook

We expect base metal prices to trade weak on the back of weak economic data from China.

LME Inventories Copper Lead Zinc Aluminium Nickel Current Stock 330750 212600 540200 3919650 430854 Change 325 100 -2650 2025 -1626 % Change 0.10% 0.05% -0.49% 0.05% -0.38%

News & Development

U.S. retail sales unexpectedly fell in February as harsh weather kept consumers from auto showrooms and shopping malls, tempering the outlook for first-quarter growth and a June interest rate increase by the Federal Reserve.
  Bank of England Governor Mark Carney signalled he was in no rush to raise interest rates, disappointing some expectations of a hike in early 2016.
The United Steelworkers union and oil companies have reached a tentative deal to end the largest U.S. refinery strike in 35 years after 40 days, sources familiar with the negotiations for a new labor accord said on Thursday.
 Aluminium stocks held at three major Japanese ports climbed for an eleventh month to hit a record high at the end of February due to robust imports. Aluminium stocks held at Yokohama, Nagoya and Osaka grew 0.8 percent in February from a month earlier to 453,400 tonnes, Marubeni Corp 8002.T said on Thursday. The trading house collects data from those key ports.

MARKET OUTLOOK: Market is expected to open on positive note and likely to remain firm during the day

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stocks recorded the biggest gain in more than a month as expectations for a rate hike were pushed back following disappointing data on retail sales.

Dow Jones	17895.2	+259.8	+1.47%
Dow Futures	17792.0	+230.0	+1.31%
Hangseng	23887.2	+89.3	+0.38%
Nikkie	19265.1	+273.9	+1.44%
SGX Nifty	8871.0	+64.5	+0.73%

 

• Asian stocks rose, following a rebound in U.S. shares, after an unexpected drop in American retail sales strengthened the case for keeping interest rates lower for longer in the world’s largest economy.
• Market is expected to open on positive note and likely to remain firm during the day
• Reliance Infrastructure has decided to monetise its cement business to fund the acquisition of Pipavav Defence and Offshore Engineering, which it is acquiring for Rs 2,082 crore.Reliance Cement, a fully-owned subsidiary of Reliance Infra, is in talks with two international cement companies, Heidelberg and Italcementi, and has offered a 50 per cent stake in the company. The prospective joint venture partner will also fund the company's cement capacity expansion - estimated to rise from five million tonnes per annum (mtpa) to 15 mtpa by 2018. (BS)
• IIP came at 2.6% vs exp 0.7% and MoM 1.7%
• CPI inflation came at 5.37% vs exp 5.21% mom 5.11%. Marginally ahead but should not have any impact
• In a major relief to the NDA government, the Congress extended its support to pass the long- pending Insurance Laws (Amendment) Bill, 2015 in the Rajya Sabha on Thursday even as a number of Opposition parties staged a walkout .Stocks like Max India, Bajaj Finserv, Exide Industries, Reliance Capital will be in focus.
• Blackstone Group is in advanced talks to buy a stake of about 40% in DLF's Cybercity in Gurgaon, a business district with 10.37 million square feet of office space. (ET).
• HSIL board of directors fixed the issue price at Rs 400 a share for QIP lower than the current market price of Rs 444 and the floor price of Rs 412.53. 
• Glenmark Pharmaceuticals Ltd received approval for generic Salmecort MDI inhaler used for management of asthma and pulmonary disease from Russia's Ministry of Health. 
• GSFC has secured the approval of central government for increasing production of neem-coated urea to 100% from the current 35%. (ET)
• Adlabs IPO revised price range to Rs 180-215 from Rs 221-230. IPO extended till 17th march.
• Tata Motors JLR Retail Sales came at 28,689 Units Vs 30,487 Units (YoY) 
• CBI sources said eight corporate houses are under the scanner: DLF Limitless Developers Pvt Ltd, HDFC Bank, Glenmark Pharmaceuticals Ltd, Modril India, Prime Living, NovaLead Pharma, IndusInd Bank and Kakardi British Realty.
• The Securities Appellate Tribunal (SAT) will announce today its order on DLF's plea against SEBI ruling that barred the realtor and its six top executives, including Chairman K P Singh, from markets for three years.
• Sarla Performance Fibers Ltd – Plant visit: We went for plant visit of Sarla Performance. Plant was running at full capacity and the plant manufactures all value added variety of polyester and Nylon yarn for international Brands. Management is down to earth and innovative. Company has also set up plant in US and is in process of ramping up its production. Last qtr the US plant was running at 20% capacity with 2 customer. Company has started supply to one more customer in Q3 and Trial Production for 4th customer is on. Key story in the company is scale up of US Plant to 70-80% capacity which can be possible in FY16. Based on our rough estimates, we believe that the company can do EPS of Rs 52 and Rs 65 in FY16 and FY17 and at current price share is trading at 7.4 and 6 PE respectively. Outlook Positive
• CPI-IPI Tracker- Economy Update- CPI Inflation Edges Up, But IPI Grows Faster- Institution Desk: Although Consumer Price Index (CPI) inflation was slightly above consensus estimate in February 2015, industrial production index (IPI) grew faster than expected in January 2015. Within inflation, core inflation continued to subside for the ninth consecutive month. This was because of higher headline inflation being largely driven by food prices. On the IPI front, not only January 2015 growth was more than expected, the growth number for December 2014 was revised upwards and the contraction in October 2014 was lower than previously estimated. Although the primary driver of IPI was the manufacturing sector, details showed that the growth in manufacturing activity was not broad-based as more than 50% of sub-industries grew at a slower pace compared to January 2014. Going forward, we believe that headline and core inflation numbers are likely to stay largely unchanged. Further, we expect IPI to grow more than 3% in February 2015. The latest overall data does not change our view on the Reserve Bank of India’s (RBI) rate move next month. We continue to believe that the repo rate will be kept unchanged. In fact, rate cut is likely to materialise only in the second-half of FY16, provided the US Federal Reserve postpones rate hike (which is our base case scenario).