Updates on Bullion, Base Metals and Energy Levels 3rd June 17

Gold futures edged lower on Monday after a surprise upbeat reading in the China Caixin PMI in June. The Caixin China manufacturing purchasing manufacturers' index (PMI) for June beat expectations, offering another signal that the world's second-largest economy continues to defy expectations for a slowdown. The private survey came in at 50.4, marking a three-month high. It was up from May's 49.6, which was an 11-month low. In the week ahead, investors will be focusing on Wednesday’s minutes of the Fed’s latest meeting for fresh cues on the timing of the next US rate hike. Friday’s US jobs report for June will also be closely watched.

Crude oil futures inched higher for sixth straight session on Thursday after a decline in weekly U.S. crude production temporarily eased concerns about deepening oversupply. U.S. crude production dropped 100,000 barrels per day (bpd) to 9.3 million bpd last week, the steepest weekly fall since July 2016. However, and Global oil supplies remain ample despite output cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries (OPEC) and other producers since January.

Crude oil futures traded higher on MCX as investors and speculators extended their positions in the energy commodity as drilling activity in the US for new oil production fell for the first time since January. However, reports of rising OPEC output last month even as the group has pledged to cut supply, capped some gains.

Technical Level

Gold 

Support at 28300 and Resistance 28450

Break and sustain below 28300 will take it to 28150---28080 and then to 27900 mark in days to come else could touch its resistance level of 28450 again.

Fresh buying can be initiated above 28450 mark.

Trade with levels only.

Silver

Support at 38500 and Resistance at 38900

Below 38500 panic remain continue till 38200---38000 and then to 37700 mark else could touch its resistance level of 38900 again.

Further upside rally will see above 38900 mark.

Crude

Support at 2970 and Resistance at 3025

Be cautious at upper levels as we will expect correction in Crude oil. 

Any reversal seems will update. 

Natural Gas 

Support 191.50 and Resistance 195

Looks positive and could touch its resistance level of 195. Break and sustain above 195 will take it 199---202 mark else could touch its support level of 191.50 mark.

Fresh selling can be initiated below 191.50

Copper 

Hurdle at 391… Break and sustain above 391 will take it to 394—397 and then to 401+++ mark.

Fresh selling can be initiated below 386 mark.

Economic Data

07:30 P. ISM Manufacturing PMI:  Previous 54. 9 Forecast 55.00 Actual –??

Impact – Increase ISM Manufacturing PMI– will have negative impact on bullion and positive impact on base metals and dollar index or vice – versa.

More will update soon!!

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Currency Report 3rd July 2017

                       

The Indian rupee pared all the losses and closed marginally stronger against the US dollar ahead of the rollout of goods and services tax due later on Friday which has been implemented on 30th June mid night onwards. The GST will replace the existing multiple indirect taxes with uniform tax across India, making it easier to do business in Asia’s third-largest economy and in turn boost domestic stocks. But the markets will need some time to adjust to the GST implementation process, which could partially hurt corporate earnings, although the ill-effects will likely fade in the long term. We expect the rupee to trade sideways with a negative bias in a narrow range in the absence of any strong domestic or global cues.

The 10-year bond yield closed at 6.511%, a level last seen on 12 June, compared to its previous close of 6.507%. Bond yields and prices move in opposite directions.

USDINR July

Support at 64.75 and Resistance at 65.08.

Below 64.75 panic likely to continue till 64.50—64.35 and then to 64.18  mark.

Fresh buying can be seen above 65.08.

GBPINR

Support at 84.10 and Resistance at 84.70

Close below 84.10 will take it to 83.70—83.40 mark else could touch its resistance level of 84.70.

Fresh buying can be initiated above 84.70 mark.

EURINR

Support at 73.80 and Resistance at 74.25

Close above 74.25 will take it to 74.60---74.90++ mark else could touch its support level of 73.80 mark.

Fresh selling can be initiated below 73.80 mark.

JPYINR

Support at 57.60 and Resistance at 58.10

Looks weak and could touch its support level of 57.60, Break and sustain below 57.60 will take it to 57.30—57.10 mark.

Fresh buying can be initiated above 58.10 mark.

More will update soon!!

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Daily Derivative Outlook 3rd July

• Nifty July 2017 futures closed at 9517.40 on Friday at a discount of 3.50 points over spot closing of 9520.90.

• Call writing was seen at 9500 & 9700 strikes, put writing was seen at 9400 strike.

• Maximum positions are at 9700 CE and 9400 PE. Nifty is expected to trade in the range of 9350-9700.

•INDIGO (51%), INFIBEAM (24%), OIL (23%), LT (17%) and KSCL (IBREALEST%) were the top open interest gainers in the market.

 • BPCL (-10%), M&MFIN (-9%), PTC (-5%), BERGERPAINT (4%) and ABIRLANUVO (-4%) were the top open interest losers in the market.

•Metals, Realty and Telecom stocks gained the most whereas Infrastructure, Banking and Automobile stocks lost the most during the week.

• The Nifty Put Call Ratio (PCR) finally stood at 1.0 for July month contract.

 • FIIs were net seller of around 1318 Cr whereas DIIs were net buyers of around 620 Cr in cash segment.

• Nifty July futures saw an addition of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 19.57 million (mn) units.

Derivative Idea

INFIBEAM added around 21% of open interest as Long positions. On Daily charts, INFIBEAM has given symmetrical triangle breakout at 1080 level with increase in volumes too.

Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.

Trading Recommendations

Buy INFIBEAM (July) Future above 1120 Stop loss 1080 Target 1180—1200++

More will update soon!!

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Trump Undecided on Steel Tariffs as Trade-War Worries Mount

President Donald Trump hasn’t decided yet whether to impose punitive measures on steel imports for reasons of national security, as the administration missed a self-imposed deadline to conclude its investigation by Friday.

While the Commerce Department has until early next year to determine whether foreign-made steel threatens U.S. security under Section 232 of the Trade Expansion Act, Secretary Wilbur Ross wants a speedy probe that he hoped to be concluded by the end of June.

The president hasn’t made up his mind yet on the tariffs issue, White House spokeswoman Sarah Huckabee Sanders said at a media briefing in Washington on Friday. A finding by Commerce that steel imports pose a security risk, including to the defense industrial base, could lead Trump to impose tariffs, quotas, or a combination of the two.

The prospect of slapping tariffs on steel imports has raised concerns about sparking a trade spat with some of America’s strongest allies, which supply the abundance of U.S. steel imports. It could also raise prices for U.S. steel users that would make them less globally competitive. The U.S. benchmark price for steel rose 55 percent last year after a slate of successful trade cases levied anti-dumping and countervailing duties on the metal.

But Trump and some top advisers are “hell-bent” on imposing tariffs on steel imports, according to a report by Axios, an online publication. Trump is leaning toward supporting tariffs that could be in the 20 percent range, despite opposition from nearly all of his cabinet, Axios said, citing unnamed administration sources.

(https://www.bloomberg.com/news/articles/2017-06-30/white-house-said-to-prepare-a-final-decision-on-steel-tariffs)

More will update soon!!

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Fiscal deficit: In first two months, gap at over 68% of full-year target

India's fiscal deficit touched Rs 3.73 lakh crore ($57.69 billion) during April-May period or 68.3 per cent of the budgeted target for the current fiscal year that ends in March, government data showed on Friday.

The fiscal deficit was 42.9 per cent of the full-year target during the same period a year ago.

Net tax receipts in the first two months of 2017/18 fiscal year were Rs 67,670 crore, the data showed.

India aims to bring down its federal fiscal deficit to 3.2 per cent of gross domestic product in 2017/18 compared with 3.5 percent in the previous year.

(http://www.business-standard.com/article/economy-policy/fiscal-deficit-in-first-two-months-gap-at-over-68-of-full-year-target-117063000678_1.html)

More will update soon!!

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Bad Loans May Rise To More Than 10% By March 2018, RBI Warns

India’s gross bad-loan ratio may rise to more than 10 percent by March 2018, the Reserve Bank of India said on Friday.

In the financial stability report released by the banking regulator, the RBI noted that the gross non-performing assets (NPA) ratio of the banking sector has already risen to 9.6 percent as on March 2017, from 9.2 percent as on 30 September.

Public sector banks continued to be the underperforming segment among scheduled commercial banks, as their gross NPA ratio showed a consistent rise since March 2013. NPAs in public sector bank loans to industries worsened to 22.3 percent as on March 31, 2017, from nearly 20 percent in September last year

Stressed Assets Ratio Improved

Stressed assets ratio in banks, however, showed some decline, coming down to 12 percent in March 2017, as compared with 12.3 percent in September 2016. The decline was owing to a reduction in the level of restructured advances on bank books, the regulator said.

However, stressed advances in the industries segment continued to worsen, rising to 23 percent of total advances in March, as compared with 22.3 percent in the same month last year. The ratio worsened primarily due to segments such as cement, vehicles, mining and quarrying and basic metals, RBI said.

(https://www.bloombergquint.com/global-economics/2017/06/30/financial-stability-report-rbi-gross-bad-loan-ratio-may-rise-march-2018-macro-stress-test)

More will update soon!!

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Update on Nifty levels, Bank Nifty levels and Equity Pick of the day 3rd July 2017

Nifty 9,520 /Sensex 30,921/ Bank Nifty 23,221

24 Advances / 26 Declines/ 1 Unchanged

Indian equities settle with paltry gain; Nifty ends above 9500 marks

Indian equity markets started the session on a sluggish note but managed to eke out some gains by the end of trade, as the benchmark indices clawed back into the green terrain in the last leg of trade on getting some supportive leads from the European markets. The session largely remained characterized by choppiness as investors remained cautious ahead of the landmark tax reform Goods and Services Tax (GST), which is set to launch latter Friday midnight. The indices ended the month of June in negative, first monthly loss this year.

Broader markets managed a touch better than the larger peers, as the BSE’s midcap and small cap indices settled with gains of 0.63% and 0.66% respectively. Sentiments got some support with Industry body FICCI's report that the rollout of GST will bring about significant gains to India's economy and it looks forward to working with the government for successful implementation of the crucial tax reform. Also, Arun Jaitley said that GST is an efficient and simple system with less corruption, adding that prices should decline after GST is in place July 1, while anticipating some teething troubles. Meanwhile, Shares of telecom companies declined after ICRA’s latest report indicated that intense competition and pricing pressure will continue to take a toll on the telecom sector with industry revenue expected to fall another 6 percent during the current financial year. Further, mixed reaction was observed in real estate stocks after the government on Thursday hiked the GST rate for the construction sector to 18% from 12%, but removed land value from computation of tax liability. Auto stocks edged lower on worries that GST would push up prices of cars and lead to a decline in sales.

On the global front, Asian equity markets ended mostly lower on Friday, as major central banks signalled that the era of cheap money was coming to an end, which hurt both U.S. markets overnight. Japanese shares hit two-week lows, with a stronger yen, weak overnight cues from Wall Street and mixed economic reports weighing on sentiment. While consumer price inflation rose for the fifth straight month in May, consumer spending remained tepid, the jobless rate ticked higher and industrial output slipped back into contraction, adding to underlying risks. Further, Hong Kong shares closed down, tracking weak global markets, but recorded their sixth straight monthly gain on expectations of supportive measures from Beijing at the 20th anniversary of Hong Kong's handover to China on July 1. Meanwhile, European stocks edged higher Friday, with technology and consumer-related shares on the mend after a hefty selloff, but the region's benchmark was still on track to finish June in the red.

Back home, market breadth remained optimistic, as there were 1358 shares on the gaining side against 1209 shares on the losing side, while 184 shares remained unchanged.

FII’s Activity 30-June-17

The FIIs as per Friday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.

In equity segment, the gross buying was of Rs 6901.94 crore against gross selling of Rs 7634.23 crore. Thus, FIIs stood as net sellers of Rs 732.29 crore in equities.

In the debt segment, the gross purchase was of Rs 2195.77 crore with gross sales of Rs 1483.58 crore. Thus, FIIs stood as net buyers of Rs 712.19 crore in debt.

Now what to expect next??

Nifty Levels

Support at 9500 and resistance at 9580

Below 9500 will see panic till 9420---9380-mark else it could test its resistance level of 9580 again.

Rally will see only close above 9580 level only

Bank Nifty Levels

Below 23200 will see further downside panic till 23000---22850 mark.

Rally will see only close above 23650 marks

Trade with levels only

Today's Top Pick

Havells

Above 460 will see upside rally till 472---475+++ mark in days to come.

Looks weak only if close below 450. 

Any sharp down fall will be buying opportunity in it.

Corporate Action Today

The Federal Bank Limited- Annual General Meeting/ Dividend - Rs 0.90/- Per Share

Petronet LNG Limited- Bonus 1:1

The South Indian Bank Limited- Annual General Meeting/Dividend - 0.40 Per Share

More will update soon!!

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Updates on Bullion, Base Metals and Energy Levels 30th June 17

                        

Gold futures ended lower on Thursday as signs that central banks may scale back their ultra-loose monetary policy pushed bond yields higher on both sides of the Atlantic. However, some losses were capped as the dollar slipped against a basket of major currencies.

Crude oil futures inched higher for sixth straight session on Thursday after a decline in weekly U.S. crude production temporarily eased concerns about deepening oversupply. U.S. crude production dropped 100,000 barrels per day (bpd) to 9.3 million bpd last week, the steepest weekly fall since July 2016. However, and Global oil supplies remain ample despite output cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries (OPEC) and other producers since January.

Copper futures edged higher on MCX due to firm trend at the domestic spot markets on increased domestic demand. Moreover, covering-up of short positions, today being the last day of June also added support to copper prices’ uptrend.

Technical Level

Gold 

Support at 28350 and Resistance 28700

Trading in range either side breakout with volumes will decide further.

Silver

Support at 38000---37700 and Resistance at 38600

Below 38300 panic remain continue till 38000---37700 mark else could touch its resistance level of 38600 mark.

Further upside rally will see above 38600 mark.

Crude

Support at 2880 and Resistance at 2950

Close above 2950 will take it to 2980—3025 mark else could touch its support level of 2880 again

Fresh selling can be initiated below 2880.

Natural Gas (July)

Support 196 and Resistance 202

Break and sustain below 196 will take it to 193—190 and then to 187 mark.

Fresh buying can be initiated above 202 only.

Copper 

Copper unable to breach its resistance level 386 and slipped.

Now what to expect??

Support at 381, Break and sustain below 381 will take it to 377—373 mark else could touch its resistance level of 386 again.

Fresh buying can be initiated above 386 only.

Economic Data

07:00 P.M Revised UoM Consumer Sentiment:  Previous 94.5 Forecast 94.5 Actual –??

Impact – Revised UoM Consumer Sentiment – will have negative impact on bullion and positive impact on base metals and dollar index or vice – versa.

More will update soon!!

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