Gold continues to fall

Gold season seemed off as the lowering physical consumption of the commodity dragged the prices down to the lowest level recorded in a week. On the other hand, equity trading hiked as more and more investors followed the positive market sentiment.

Immediate delivery Gold shed 0.6 percent costing $1,296.36 an ounce. The trading price set lowest fortnight record, breaking last record of  $1,297.86 set on 16 July 2014 in Singapore.

The yellow metal is after the the weekly drop trend after three days of withdrawal from the market. Analysts predicted, "Gold is planning to fall back in the cycle after the turn around in May."

Predictions of Federal Reserve's decreasing the trigger points in the precious metal trader pulled MCX Bullion down by 28 percent in the previous fiscal year.

Facebook Inc. outperformed in the market yesterday crossing analytical estimates. The S&P 500 index climbed setting a new record on Wednesday. 

The combined data presented higher consumption in China over the previous largest gold consumer India. According to latest records, consumption in China dropped 19 percent in the first quarter of FY 2014-15. Second largest German Bank quoted, "Indian demand is set up at no rising point as restrictions continue to block imports and hence Gold cannot expect any gains in pricing from the country."

“Increasing investments in the U.S. equities continues to challenge gold, amid safe-haven's support with increased buying,” a commodity researcher working in renowned Australian bank said.

Goldman Sachs Group Inc. restated a call option at the yellow metal gold slipping to $1,050 by the end of 2014 amid the U.S. economy's fast recovery, analysts said. The bank hiked the long-term citation by 13 percent to supporting a cost level of $1,200 in 2014-dollar terms (the marginal cost).

Gold revived 8 percent recently in various parts of Ukraine and the Middle East with easing tensions of geopolitical tensions. The price did not to climbed as expected after a pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region, where earlier Malaysian Air passenger jet shot on July 17, the government said.

Gold with delivery in December slugged 0.6 percent to $1,298.40 an ounce in New York, reporting the lowest level since July 16, prior trading at $1,300.10. t The largest bullion-backed exchange-traded product, SPDR Gold Trust holdings climbed again today following the rise yesterday, data on its website showed.

Immediate delivery Silver downgraded 0.5 percent to $20.8065 an ounce. Spot platinum fell 0.3 percent to $1,477.25 an ounce, and palladium dropped 0.2 percent to $869.75 an ounce.

 

Sensex jumped to set a new record

BSE benchmark indicated reviving markets as it set a new closing peak of 26,147.33 backed by widespread buying of funds.

Retail investors encouraged with growth in Q1 profits made the market breath optimistic. Blue-chip companies covered up pending short positions are trading high in the market by speculative investors.

Further, a firm trend in global markets on producing unexpectedly high earnings from companies and easing concerns over Ukraine influenced the trading emotions here, brokers quoted.

30-share BSE index Sensex climbed 121.53 points to closing at 26,147.33 and the 50-share NSE index surged 27.9 points to ending at 7,795.75.

In BSE sectoral indices, IT and TECH indices leaded the hike growing 2.24 percent and 1.74 percent, respectively. The next top growing indices listed consumer durable with 0.37 per cent and auto with 0.19 per cent.

The laggards included metal, healthcare, realty and power indices steeply slipping at 0.39 percent, 0.17 percent, 0.14 percent and 0.05 percent, respectively.

Top gainers are Infosys, Hindalco, TCS, Wipro and M&M, and the shares of Tata Steel, Tata Power, Maruti, ONGC and Axis Bank dragged the market.

The benchmark BSE Sensex jumped 0.62 percent, i.e. 162.84 points amounting to 26,188.64, in early trade close to it's all time high of 26,190.44 set on July 8. Benchmark index, Sensex rebounded 1,019 points in the last six sessions.

The National Stock Exchange index Nifty hit an all time high setting a new record at 7,809.20 points, pushed up with surging stocks of  IT, banking, tech, oil & gas, auto, and pharma. Major reason boosting their stocks values is hiking foreign capital influx along with boosting corporate earnings.

50-issue index revived at the 7,800-level for the second time after 8 July this month. Nifty expanded by 0.53 percent, equivalent to 41.35 points to creating the new benchmark at 7,809.20. The previous intra-day high breaking records of set at 7,808.85 points.

Besides the rising optimism in investors' sentiment, with arrival of monsoon, positive economic data and global cues inflicted the growth pattern.

Top gainers on NSE listed Infosys, Bank of Baroda, Reliance, GAIL, Sun Pharma and Jindal Steel.

Foreign portfolio investors (FPIs) purchased shares with a net-worth of Rs 412.03 crore on Tuesday, according provisional data from the stock exchanges.

European stocks expanded following Tuesday's gains as investors weighed earnings results from companies. Daimler AG and ABB (ABBN) Ltd. leaded the list where US stock-index futures changed a little and Asian shares jumped.

Asian shares hiked supported by decline in recent geopolitical tensions. Violence stood firm in Gaza, but positive outlook are easing tensions in Ukraine after pro-Russian rebels sent the flight recorders and victims' remains from a downed Malaysian airliner to international authorities.

 

Gold & Silver futures down

MCX GOLDPETAL July contract traded Rs 7 lower, falling by 0.24 percent at Rs 2863. The GOLDPETAL rate hit Rs 2870 highest on Tuesday and recorded lowest price at Rs 2861 in intra-day. 2323 contracts recorded finalized trades in the series of July contracts. Prices of the commodity slipped Rs 115, or 3.86 percent in the July series so far.

August contracts of MCX GOLDPETAL traded at Rs 2839 losing Rs 5, or about 0.18 percent. The GOLDPETAL rate crossed the intra-day top limit at Rs 2843 and reported lowest at Rs 2833. 960 contracts made the deals in August contracts as of Tuesday. GOLDPETAL prices shredded Rs 261, or 8.42 percent in the August series so far.

MCX GOLDPETAL September contract dropped by Rs 5, or 0.18 percent exchanging at Rs 2838. The GOLDPETAL rate measured the highest gains at Rs 2839 and downfall capped at Rs 2833. 118 contracts reported exchanges in the market today. GOLDPETAL prices appreciated Rs 163, or 6.09 percent in the September series so far.

The restrictions on Gold trading decided to continue according to the statements of Financial Minister Arun Jaitely.

"The measures taken by the government and the RBI restrained India's current account deficit to USD 32.4 billion in 2013-14 and improved foreign exchange reserves to USD 316.4 billion on July 4, 2014," Jaitley said in reply to questions in Rajya Sabha. He gave heads up to the restrictions on gold import quoting, "apparently seems to have worked" and added the government is trying to contain CAD at "containable level".

MCX SILVERM August contract dropped Rs 194, or 0.43 percent trading at Rs 45000. The SILVERM rate capped intra-day high at Rs 45140 and dropped to Rs 44856 lowest on Tuesday. 8292 contracts finalized on the exchange. SILVERM prices fell Rs 2106, or 4.47 percent in the August series.

MCX SILVERM November contract recorded trades at Rs 45839 lowered by Rs 256, or 0.56 percent. The SILVERM rate planted an intraday high of Rs 46200 and low of Rs 45649. 325 contracts executed on Tuesday. SILVERM prices slipped Rs 4357, or 8.68 percent in the November series.

 

Sensex and Nifty recorded 1.5 week highest

Indian markets surged highest in one and a half week as steep growth in banks pushed up the benchmark indices. S&P BSE Sensex opened 205.40 points up at 25846.96 and the Nifty rose 54.15 points or 0.71 percent at 7718.05. Major reasons buckling up the markets include higher foreign investments and improved monsoon reviews.

 

Foreign portfolio investors (FPIs) invested in Indian shares worth a net Rs 574.47 crore on Friday, 18 July 2014, as per provisional data from the stock exchanges.

Union Minister of State (MoS) Science and Technology (Independent Charge), Earth Sciences (Independent Charge), MoS in Prime Minister's Office (PMO), Department of Personnel and Training, Atomic Energy, Space and Earth Sciences, Dr. Jitendra Singh said on Sunday, 20 July 2014, "There has been significant increase in the monsoon during the last one week beginning from 13 July 2014." He added that although rains during the month of June and first two weeks of July, recorded deficiency of 43%, in the week beginning 13 July 2014, the figures contracted to 32%, recording 11% improvement in the monsoon level." 

The monsoon forecast for next two weeks is very good, particularly in Central India and coastal regions of South India. There is, therefore, no reason to unnecessarily alarmist on the issue of monsoon, Dr. Singh said

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee swung with an average at 60.20, compared with its close of 60.275 on Friday, 18 July 2014.

The market pulse stayed positive as the gainers showed up for every loser on BSE. In figures, 1,439 shares surged and 405 slugged.

BSE Mid-Cap index climbed 1.2 percent and BSE Small-Cap index jumped 1.31 percent in the morning report. Both the indices exceeded predictions indicating healthy strong potential growth in the market.

Stocks in the Asian market poised the growth trend with optimistic foreign portfolio investors walking in and improved monsoon predictions as rains hit towns boosting domestic stock exchanges. Key benchmark indices in Taiwan, Singapore, Indonesia, Hong Kong, and South Korea rose by 0.01% to 0.7%. China's Shanghai Composite fell 0.18%.

Shares of Banking sector pushed up domestic growth channels. Axis Bank set a new record in its portfolio hitting highest values ever. Axis Bank climbed 0.98 percent to Rs 2,015.65 after hitting record high of Rs 2,022.65 in intra-day trade.

Kotak Mahindra Bank announced its entrant in Share Purchase Agreement with FTIL purchasing 76.49 lakh shares aggregating to 15 percent equity stake in Multi Commodity Exchange of India (MCX) for Rs 459 crore. Though, the final closing is waiting for regulatory approvals. Kotak gained 2.63 percent as the news came into light.

ICICI Bank moved up 0.72 percent, IndusInd Bank hiked 1.38 percent, Yes Bank surged 1.09 percent, and Federal Bank climbed 1.11 percent.

HDFC Bank boosted 1.52 percent ahead of its Q1 results today, 21 July 2014. After first quarter results, the bank grew further up 129.58 points or 0.51%, off close to 90 points from the day's high and up about 40 points from the day's low.

Among PSU bank stocks, State Bank of India (SBI) stepped up 2.34 percent, Canara Bank walked up 2.48 percent, Union Bank of India rose 1.53 percent, Bank of India climbed 1.12 percent, Bank of Baroda jumped 1.03 percent and Punjab National Bank gained 0.89 percent.

Trading in US index futures indicated that the Dow predict falling 11 points at the opening bell on Monday, 21 July 2014. US stocks grew on Friday, 18 July 2014, where better earnings from Google Inc., the world's third-largest company, refocused investors on economic growth amid crises in the Middle East and Ukraine. 

 

RBI modifies payment bank guidelines

The central banking authority of India drafted modification in the guidelines for setting up a payment bank. New guidelines ease the procedure widening reach to every individual having minimum 10 years experience in financial or banking sector. The payment bank must hold two conditions, first minimum paid up capital of Rs 100 crore, second individual founder's contribution minimum 40 percent. 

India central bank, Reserve Bank of India proposed allowing everyone including super-market chains and telemarketing companies, anyone with any kind of experience of financial markets to set up a payment bank.

"Existing non-bank pre-paid instrument issuers (PPIs), non-banking finance companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives, and public sector entities are eligible to set up a payments bank," according to notification issued by the RBI.

Issuance of license for payment bank have to fit the preset criterion. There will be no flexibility in cases if any of credentials are lacking. RBI stated, "we are analyzing eligibility of individuals their past records of integrity, credentials, track record and financial soundness of least five years working of their businesses."

RBI holds both the conditions of minimum contribution and minimum paid up capital mentioned above for sanctioning a payment bank license.  After commencement of business of the bank, certain a time-line following the percentile of shareholdings by the promoter. In the first three years, shareholdings of the promoters  come down to 40 per cent, further 10 percent down to 30 percent in a period of 10 years, and to 26 per cent within 12 years (Computation of years from the date of commencement of the bank).

RBI said, "both payment banks and small banks are "niche" or "differentiated" banks, having similar objective of facilitating financial involvement".

Structure of small banks is accommodating all the basic banking services like deposits and supply of credit in a limited area of functioning.

From expansion point of view, payment banks with limited products in banking have access to a wider network of access points especially remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others.

The first two differentiated bank licenses issued in April after a decade of the promises made to the sector. The ruling government in 2004 brought up hopes of interested investors but did not issue any license until Modi government took over the charge of governance in India.

RBI disclosed its future planning would involve reforming licensing exercise based on the learned experience it gets from the revised guidelines for differentiated small banks. 

The central bank said it would make suitable changes to the current regulations and put in place a structure for on-tap authorization of universal banks in the private sector in the current financial year itself.

Small banks and other differentiated banks serving niche interests, local area banks, payment banks etc are meeting the demands of credit and remittance of small businesses, unorganized sector, low-income households, farmers and migrant work force, RBI stated.

RBI sought views and comments on the proposed guidelines from all interested parties and general public, latest by 28 August 2014.