The commodity futures market has started losing its sheen after a stupendous growth rate of 96.05 per cent in the last financial year
'Those betting against PSUs will likely be punished in this upswing.'
Dubai Gold and Commodities Exchange, the world's newest commodities exchange and the first such marketplace in the Middle East, started trading this morning.
The US Fed interest rate decision, domestic inflation data and global trends would be key driving factors in dictating movement in the market this week, as the Lok Sabha elections outcome and the RBI policy decision are behind us, analysts said. The past week was a roller-coaster ride for investors as markets swung sharply in both directions before closing with strong gains.
India recorded a current account surplus of $5.7 billion or 0.6 per cent of GDP in the March quarter, the Reserve Bank of India said on Monday. This is the first time in ten quarters that the crucial metric of the country's external strength has turned into surplus mode. In the year-ago period, the current account deficit stood at $1.3 billion or 0.2 per cent of GDP, and the same was $8.7 billion or 1 per cent of GDP in the preceding quarter ending December 2023.
The commodity transaction tax (CTT) proposal has started taking its toll on commodity exchanges. According to exchange officials, the turnover of commodity bourses has dropped sharply on transaction tax proposal and reports that the government may ban Futures trading of more commodities. The turnover may get eroded by another 20-30% once CTT comes into effect. CTT was unique and it has not been imposed on any Futures market anywhere in the world.
India's apex commodities market regulator the Forward Market Commission (FMC) says there is no plan now to ban futures trading in any other commodity.
While the minimum holding period for LTCG taxation has now been lowered, the tax outgo could be a bit higher under the new structure.
It will be the first to go, in what has become an overcrowded segment since India first allowed futures trading in commodities in 2003.
From the Sensex basket, Tech Mahindra, Tata Steel, JSW Steel, HCL Technologies, Tata Consultancy Services, Larsen & Toubro and Kotak Mahindra Bank were the biggest laggards. Mahindra & Mahindra, Power Grid, Bajaj Finance, IndusInd Bank and Maruti were the major gainers.
Commodity investments can help you diversify your portfolio in asset classes other than equity and debt, says Dwaipayan Bose.
Amidst concerns of liquidity crunch due to weak sentiments in stock markets across the globe, investors have started winding up their positions in commodities such as gold, silver and nickel. Investors are selling off their positions in commodities market globally because of the liquidity crisis owing to weak stock market trends internationally, analysts said.
The European Union's push to introduce new capital requirements for banks through the Basel-II (Revised international capital framework) pact may hit specialist commodity traders, such as large oil companies.
The Indian government recently had banned futures trading in a few commodities. But this has not dampened major companies to eye futures trading in commodities. Last week, government permitted companies with an initial capital of Rs 100 crore (Rs 1 billion) to set up commodity exchanges. Top officials in the Anil Dhirubhai Ambani Group and Kotak Mahindra said that they are planning to set up commodity exchanges.
The report from the United Nations Conference on Trade and Development said that commodity exchanges in India and China are becoming major players in global markets.
From the Sensex basket, Tata Steel jumped over 5 per cent. Mahindra & Mahindra, JSW Steel, Tata Motors, Axis Bank, Sun Pharma, Reliance Industries and Maruti were the other biggest gainers. Infosys, Tata Consultancy Services, Titan, Wipro, Hindustan Unilever and Nestle were among the laggards.
Britain's 'remain' option gaining traction, with the implied probability of such an outcome at 78 per cent.
'Those satisfied with returns and not expecting further rally could be booking profits and also stopping SIPs.'
Since commodities futures market is a relatively new entrant in India, not many investors know how to tap and benefit from trading in various commodities. Here's help.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks. In India, domestic fundamentals such as steel consumption remain robust, hence one can take fresh positions in these counters," said Amit Dixit, an analyst at ICICI Securities.
The stock exchange BSE has called off the merger of its unit at the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC), India International Exchange (India INX), with NSE International Exchange (NSE IX), a similar unit floated by rival National Stock Exchange (NSE), according to sources familiar with the development. BSE and NSE had been in discussions for the merger for over a year, but it has yielded no results, they said.
The finance ministry expects a broad-based moderation in inflationary pressures on the back of an anticipated reduction in food prices as a result of the uptick in summer sowing. The retail inflation rate remained stubbornly clung to the 5 per cent mark in seven of the past eight months. "Core inflation is trending downwards, indicating a broad-based moderation in price pressures... Driven by strong domestic growth and benign global commodity prices, core inflation is declining continuously.
The turnovers of gold, silver and agri commodities like guar seed and chana are much more than that of blue chips traded on the Bombay Stock Exchange.
India's Parliamentary Standing Committee on Food and Consumer Affairs has called for a complete ban on futures trading in essential commodities like wheat, rice and sugar.
The Multi-Commodity Exchange on Wednesday initiated changes in the composition and weightage of India's first real-time composite commodity futures index - MCX-Comdex.
Trade and Development Report 2007 prepared by Heiner Flassbeck said that commodities have created lots of opportunities globally, but developing countries will be left if they do not utilise the funds diligently.
The dollar has fallen not just against commodity-linked assets but against other asset prices.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks.
'If you invest in sovereign gold bond, you are going to get the price rise of gold over an eight year period.' 'You're also going to get that two-and-a-half percent which the Government of India is willing to give you, treating the money that you've invested in the sovereign gold bond as a kind of a FD or a deposit.' 'That kind of return you can never get anywhere else.'
Before entering into buy and sell transactions please be aware of all the factors that go into the mechanism of pricing, trading and clearing.
After a gap of more than 13 years, the National Commodity and Derivatives Exchange (NCDEX) is all set to launch a futures contract in groundnut (in shell) to fill a void in oilseeds complex futures because of a ban in several high-volume commodities.
Generally, it has been seen that commodity prices are driven higher by surging demand throughout the world. But the irony is that the latest surge comes amid concerns about a weaker global economy. At present, commodities prices are rising because the U.S. interest rates are falling below the rate of inflation.
ICICI Venture Funds Management Co. acquired 3.55 per cent, Infrastructure Leasing & Financial Services 5 per cent and Kotak Group 1 per cent in MCX from the holding company Financial Technologies. The transaction values the company at $1.1 billion.
'We crossed Rs 1.7 trillion in three months this financial year.'
Top government officials in New Delhi have started discussions with stakeholders ranging from shipping and container companies to export promotion councils to understand the impact of the Iran-Israel tensions and plan ahead. Inter-ministerial talks are also being lined up amid the crisis situation in West Asia, sources confirmed. While the crude flows are not directly under any threat, elevated oil prices remain a concern, according to officials.
Iran has offered to help India meet its energy needs by relaunching rupee-rial trade for export of oil and gas, said Iranian ambassador to India Ali Chegeni. Chegeni said if both the countries resume rupee-rial trade, bilateral trade can touch $30 billion. Iran used to be India's second largest oil supplier but New Delhi had to halt imports after the former US president Donald Trump withdrew from the nuclear deal with Iran and re-imposed sanctions on its oil exports.
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