Why
You Should Keep A Close Eye On Bank Nifty?
Bank stocks are turning
favourable among the mutual funds (MFs). The MFs have increased their
allocation for bank stocks to a record high of nearly Rs. 94,000 crore by
June-end. Certainly, strict steps taken by the government and RBI to clean up
the banking system are helping the bank stocks. And that can also be seen in
the Bank Nifty performance.
In the one-year period,
however, the bank sector is yet to show remarkable growth. The above dashboard
shows that except four bank stocks, all are in red. The four gainers were Yes
Bank, Indus Ind Bank, HDFC Bank and Kotak Bank. During the period, Bank
Nifty is down 0.54%. Meanwhile, three out of the four gainers marked double
digit growth in the last year period. Yes Bank leads with gains of 52.06%.
OIL:
Renewed calls by some OPEC members for
production cuts helped support crude
oil futures on
Monday .
Members of OPEC to
freeze production levels in a bid to control output that has been outpacing
demand.
Russia, the world’s top oil producer and a
non-OPEC member, was quick to dismiss calls for a freeze.
In the U.S., the number of oil rigs
drilling in the U.S. rose for the sixth consecutive week to 381. Additionally,
hedge funds cut their long bets on Brent crude to the lowest since January,
while investors reduced their bullish holdings to U.S. crude oil to its lowest
since February.
China’s crude imports stood at about 7.35
million barrels a day in July, the slowest import trend since January, reason may be a fresh sign that the
Chinese economy is slowing down.
COPPER:
China’s copper ore and concentrate
imports transit the Port of Lianyungang hit a record high of 714,500 tonnes in
the first seven months of this year.
The unwrought copper and copper semis
imports in China dropped 14.3% MoM to 360,000 tonnes in July. Does this mean
domestic demand weakening further and will this drag down copper prices
Our Copper MMI gained just one
point. Unlike other base metals, Copper on the London Metal
Exchange continues to trade up and down. The metal struggled near $5,000
for the ninth-consecutive month.
Copper
Markets In Deficit
According
to the International Copper Study Group (ICSG), the refined copper balance
for the first four months of 2016 indicates a production deficit of around
119,000 metric tons (and a seasonally adjusted deficit of about 129,000 mt). This
compares with a production surplus of around 13,000 mt (a seasonally adjusted
surplus of about 12,000 mt) for the same period of 2015.
Chinese Imports Surge
In
June, China imported 420,000 mt of unwrought copper and copper products, up
20.3% from June of last year. For the first half of the year, imports increased
21% compared to the same period in 2015. The growth in imports has helped
support metal prices, too. However, there are different opinions on whether
those imports are actual demand or just stockpiling into warehouses.
An
expected, new round of infrastructure spending in China should continue to keep
copper demand and China’s imports strong in the second half.
Prices Struggle
So the whole metal complex is performing
well. Markets appear to be in deficit (although with high stock levels
looming), investors are optimistic that they’ll see more stimulus coming from
China and copper imports are strong. This all sounds bullish for copper prices
this month, but traders seem unwilling to chase prices much higher than $5,000.
We have yet to see that bullish shift in
investor sentiment in copper. Unlike other base metals, it’s still early to
call this a bull market.
LME copper will narrowly range USD
4,775-4,815/mt during Asian trading hours Tuesday.
China Copper imports shot up by
19.5% year-on-year 3.09 million tons during the first seven months of
this year, while its exports were down nearly 7% on a year earlier at
2.67 million tons, as per the latest data from the General Administration
of Customs.
ALUMINIUM:
China increased its aluminium exports
in July to 390,000 tons of unwrought aluminium and aluminium products ,
up 2.6 percent from June and 8.3 percent from the same month a year ago.
For the first seven months of the year, China's exports at 2670,000
million tons, down 6.9 % year-on-year.
China Aluminum
International Trading Co. (Chalco Trading) kept aluminum prices unchanged in
east and south China markets today, but raised prices in southwest China, it
said on its WeChat.
Aluminum futures closed a bit lower this
week, declining 0.6% due in part to pressure on the base metals complex from a
rise in the value of the U.S. dollar.
Economic Calendar speculated that aluminum upside could be on
the horizon with buyers in China locking in prices for October shipments. That
is a popular month for the Far East nation to stock up on the metal in time for
winter when inclement weather can hinder shipments.
Domestic Construction Spending Hits One-Year Low
With China close to stocking up on aluminum for its upcoming
construction projects, theU.S. Commerce Department recently announced domestic
construction spending declined 0.6% to its lowest point since June 2015,
reports our own Jeff Yoders.
LEAD:
LME lead will narrowly range USD 1,775-1,795/mt during Asian
trading hours Tuesday. SMM survey of 30 Chinese lead producers finds that 47% of them
are bullish towards lead prices this week.
ZINC:
LME zinc posted a 4-day winning streak last week, challenging
USD 2,300/mt. SHFE 1610 zinc rose to RMB 17,500/mt on Monday. China’s
July CPI and PPI are expected to weaken compared to June’s
NICKEL:
Output of primary nickel in China dropped with falling output of
refined nickel and NPI in July, Shanghai Metals Market reports.
Nickel ore inventories at seven major Chinese ports kept
increasing in the week ending Aug. 5, Shanghai Metals Market reported.
Pound Stays Down After Interest Rate Decision
The
pound has continued to stay low against the US dollar following last week’s
decision by the Bank of England to cut interest rates by 25 basis points to
0.25%, today GMT sterling is trading at $1.3064.
Overall, England’s PMI dropped from 52.5 in June to 47.4, its
lowest since April 2009, any PMI reading below the 50 mark, indicates that
there has been a contraction in production.
Chinese Data Causes Little Market Volatility
On Tuesday morning Chinese inflation cooled last month as
increases in food prices eased. Producer prices, meanwhile, extended their
decline, reinforcing economists’ views that more stimulus measures are needed
to bolster the nation’s economy. The consumer price index rose 1.8 per cent in
July compared with the same month last year, the National Bureau of Statistics
said on Tuesday, a figure in line with market expectations. It compares with a
1.9 per cent increase in June.
Low consumer inflation indicates still weak demand in the world’s
second-largest economy.The government has set an official inflation target of
about 3 per cent for this year.
CAPITALSTARS

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