'By investing in a basket of funds, FoFs can help minimise the impact of underperforming funds, thus reducing overall investment risk.'
While the minimum holding period for LTCG taxation has now been lowered, the tax outgo could be a bit higher under the new structure.
Commodity ETFs (exchange traded funds) attempt to track the price of a single commodity, such as gold or oil, or a basket of commodities by holding the actual commodity in storage, or by purchasing futures contracts.
National Stock Exchange (NSE) chief Ashishkumar Chauhan on Friday cautioned retail investors against trading in derivatives and suggested them to invest in equities through mutual fund route. He emphasized that trading in Futures & Options (F&O) derivatives should be limited to informed investors who can manage risk and comprehend the market. Recently, Finance Minister Nirmala Sitharaman and chief economic advisor V Anantha Nageswaran flagged the growing risk of F&O trading for retail investors.
The Securities and Exchange Board of India (Sebi) is considering segregation of settlement for proprietary trades and retail trades to avoid misuse and circumvention by certain brokers, its chairperson Madhabi Puri Buch said recently. Proprietary trading refers to trades done by brokers and other financial institutions using their own capital. "There are some people who are permitting access to their clients through prop accounts for a variety of reasons, including wanting to fund their margins.
Finance Minister Nirmala Sitharaman on Tuesday said the securities transaction tax (STT) will be increased on futures and options (F&O) trade from October 1 to discourage retail investors from investing in the risky instrument.
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.
According to officials, after launching sugar successful on its electronic platform, NCDEX Spot has decided to go in for more commodities.
The move will allow regional bourses to demutualise and go national. Currently, there are three national and 19 regional commodity exchanges in India. FMC is likely to finalise the norms for demutualisation and upgrade of regional exchanges in the next fortnight. The regulator may grant the regional exchanges a period of 3-5 years to raise their networth to Rs 100 crore.
The Tamil Nadu-based broker is member of commodities exchange from Dharapuram, some say bonds are most likely to be fake.
Among agriculture commodities, cash crops like cotton and castor are now emerging as asset classes.
The country's largest car maker Maruti Suzuki India on Friday reported a 47.8 per cent rise in net profit for the March quarter of FY24 to Rs 3,877.8 crore, on account of higher sales volume and favourable commodity prices.
The higher margins imposed on pepper in the wake of volatiluity in the commodity's prices by the Forward Markets Commission is likely to reduced soon.
The Sebi Act deals with securities and the definition of securities, according to the Securities Contracts Act, doesn't include commodities.
Commodity investments can help you diversify your portfolio in asset classes other than equity and debt, says Dwaipayan Bose.
In fact, a cotton futures exchange was started in Bombay (now Mumbai) in 1875.
The new Samvat 2080 is viewed as a year of hope for industrial and precious metals. A key reason is the expectation of US interest rates peaking, followed by a reduction in the coming months. Regarding crude oil, its trajectory depends more on how the situation unfolds in West Asia.
The size of Reserve Bank's balance sheet increased by 11.08 per cent to Rs 70.47 lakh crore as on March 2024, leading to the highest-ever dividend payout to the government, according to the central bank's annual report. In actual terms, the increase was Rs 7,02,946.97 crore over Rs 63.45 lakh crore as on March 2023.
The Indian rupee is going to get the futures contract soon. The Dubai Gold and Commodities Exchange will list a futures contract on the Indian rupee in mid-June.
Capital markets are becoming more prominent in India's growth story, with an expanding share in capital formation and investment landscape on the back of technology, innovation and digitisation, according to the Economic Survey 2023-24 tabled in Parliament on Monday. Further, Indian markets are resilient to global geo-political and economic shocks, it added. "Despite heightened geo-political risks, rising interest rates and volatile commodity prices, Indian capital markets have been one of the best performing among emerging markets in FY24," the Economic Survey said.
Trading in other derivative products in currency, commodities expected to begin soon.
India's largest commodity bourse-the Multi Commodity Exchange (MCX)-has bagged the highest ISO certification in information security management in the world.
The Bombay Stock Exchange is set to pick up 26 per cent stake in India's first demutualised online multi commodity exchange the National Multi-Commodity Exchange.
MCX deputy managing director Joseph Massey said it was a "routine investigation" by the IT department at the exchange.
MCX offers commodity futures contracts in agriculture, precious metals, base metals and energy commodities, whereas AFET offers commodity futures contracts in white rice, rubber and tapioca.
From the Sensex basket, Mahindra & Mahindra, Tata Motors, NTPC, HCL Technologies, Larsen & Toubro, Infosys, Tech Mahindra and State Bank of India were the major laggards. Bharti Airtel, Bajaj Finance, Bajaj Finserv, Tata Consultancy Services and IndusInd Bank were among the gainers.
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The exchanges have observed significant price and volume movement in the scrips of MCX in the recent past.
Kotak Mahindra Bank has decided to buy a 15 per cent stake in Multi Commodity Exchange (MCX) for Rs 459 crore from Financial Technologies India (FTIL).
Soon, traders in India could play in the global agri futures market. India's commodity exchanges have asked the market regulator, Forward Market Commission, to permit evening trading in internationally linked agri commodities.
Experts like National Commodity and Derivatives Exchange Managing Director and CEO P H Ravikumar feel that the commodities market will steal the thunder in the coming days. The next bull run is not in stocks but in commodities, he said.
DIPP's proposal is believed to have the support of the ministry of consumer affairs, food and public distribution and was originally mooted by the Forward Markets Commission.
The Forwards Markets Commission has been working on preventing any possible conflict of interest a promoter of a commodity exchange may have between their roles of running the exchange and other businesses such as broking and trading. "So far, we had two rounds of meeting in this regard. We are resolving the issues and guidelines would be finalised by the end of October," said FMC Chairman B C Khatua.
The Reliance Anil Ambani group is believed to have decided to enter the commodity trading business by setting up a large exchange in the country as part of its plans to capitalise on the vast opportunities in this market.Kotak group is also mulling over setting up a commodity bourse by acquisition of some regional exchange to get the platform and other technical support, sources close to the development said.
Though there are many options, tread with caution even after you understand the business.
Anamika Pareek answers five most frequently asked questions about investing in silver ETFs
Integration of the spot and futures exchanges is a crucial factor for the growth of commodity futures in India. It is difficult to develop a good derivatives market without adequate spot price discovery.
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