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Crude prices fell to 5 year low on Friday before recovering some ground.
On the New York Mercantile Exchange, crude futures for delivery in January dropped by 97 cents, or 1.5%, to settle at $65.84 a barrel, marking the lowest settlement for a front-month contract since July 29, 2009. The U.S. benchmark endured a weekly loss of 0.5% after being up for the week earlier Friday.
Meanwhile, January Brent crude on London?s ICE Futures exchange slumped 57 cents, or 0.8%, to $69.07 a barrel. This represented a 1.5% loss for the week and the lowest settlement since Oct. 7, 2009.
Crude prices tumbled because of two reasons :-
1. Saudi Arabia on Thursday, reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It also cut prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel.
2. Crude was also impacted by a stronger Dollar which strengthened after a market beating non-arm pay roll data of 3,21,000 job additions in November. A stronger buck often hurts commodities that trade in dollars, since that makes them more expensive for holders of other currencies.
When Saudi Arabia had cut prices for the U.S. markets alone earlier, the thinking was that it wants to shut down the shale gas units in the U.S
But now with the Saudis cutting prices for the Asian markets as well, it is clear that they are going for retaining their market share.
We believe that this scenario is ideal for India.
Our take on what the Government should do
The Government should not pass on the benefit for any further fall in crude prices to consumers. They should infact build a oil fund with that and buy long term options to secure lower prices for India?s crude purchases.
SAILs Rs 1,700-cr disinvestment successful
Five per stake sale in Steel Authority of India (SAIL) by the government, the first leg of this financial year?s disinvestment programme, received an encouraging response from investors on Friday. The Rs 1,700-crore offer for sale (OFS) was subscribed more than two times, while the portion reserved for retail investors - those investing up to Rs 2 lakh - was subscribed nearly three times.
According to investment banking sources, Life Insurance Corporation of India invested as much as Rs 700 crore, about 40 per cent of the issue. Other prominent investors included State Bank of India (Rs 150-200 crore), United India Insurance (Rs 15 crore) and ICICI Bank (Rs 100 crore). The issue also saw participation from Hong Kong-based fund Segantil Capital Management ($15 million) and New-York based Geosphere Capital Management ($5 million).
The indicative price or the volume weighted average price of all valid bids, stood at Rs 83.9 for retail investors and Rs 83.44 for other investors, more than the floor price of Rs 83 set by the government.
Govt to consider 31 FDI proposals on Dec 16
The government will consider 31 foreign investment proposals, including that of Ratnakar Bank, Novartis Healthcare and other leading private sector banks, on December 16th.Of the 31 items on the agenda, nine are those on which the foreign investment promotion board (FIPB) had deferred a decision in its earlier meetings.
While India allows FDI in most of the sectors through automatic route, approval of the Foreign Investment Promotion Board (FIPB) in the Finance Ministry is required in certain sectors like pharmaceutical and defence, considered sensitive for the economy.
Coal India seeks returns of two cancelled Odisha blocks
State-run monopoly Coal India Ltd has sought returns of two coal blocks in Odisha that it lost following Supreme Court's September order quashing the allocation of 214 blocks. The blocks in the Ib Valley and Talcher were owned by Coal India in joint ventures with private companies.
We have requested the government to allot CIL these two blocks because substantial investment has already been made by all parties in these two blocks. "If it comes back to Coal India, which is legally possible, the project can run unhindered
Aurobindo completes $132.5-m Natrol acquisition
Aurobindo Pharma has completed the acquisition of nutritional
supplement maker Natrol Inc.The US arm of the Hyderabad-based company had last month won a bankruptcy auction for the firm with its bid of $132.5 million.The assets have been acquired under a wholly-owned subsidiary, Nature Acquisition LLC, and since changed to Natrol LLC.
SpiceJet board to meet today
Amid growing concerns over the deteriorating financial health of no-frills carrier SpiceJet, the airline's board is set to meet today to discuss measures to recapitalize the airline.The meeting comes at a time when the Directorate General of Civil Aviation (DGCA) has directed SpiceJet to prepare a payment plan by December 15th to pay about Rs 1,600 crore, according to DGCA sources, which it owes various vendors and suppliers. No timeline has been specified to make the outstanding payments at present.Out of Rs 1,600 crore, SpiceJet owes Rs 700 crore to lessors, Rs 400 crore to other vendors, Rs 100 crore to the income-tax department, Rs 200 crore to the Airports Authority of India (AAI) and Rs 80 crore to other airport operators.
Founders of India IT firm Infosys selling shares worth $1.1 billion
Four of the founders of Infosys Ltd are seeking to raise about $1.1 billion by selling stakes in the Indian IT outsourcing company.
The founders are offering 32.6 million shares in Infosys at a fixed price of 1,988 Indian rupees ($32) each, a 4 percent discount to Fridays close, the report said.
U.S. Markets Enthused by Buoyant Pay Roll Data
Key U.S. Indices closed at new highs Friday, buoyed by the higher than expected Non-Farm Pay Roll numbers. Better-than-expected jobs data was able to cushion the broader market against the blows of sliding oil.
The Dow Jones Industrial average rose 59 points or 0.33% to close at
17,959. The S&P 500 added 3 points or 0.15% to its Thursday score to close at 2,075. Both the benchmarks closed at new all time highs. It was the seventh consecutive weekly rise for them.
The Nasdaq Composite added 12 points or 0.24% to close at 4,781, but that wasn?t sufficient to make the tech heavy index close the week in the green.
November Non-Farm Pay Roll numbers came in stronger than expected at 3,21,000 jobs. The consensus estimate was a 2,35,000. The number was way higher than the 2,14,000 jobs added in October. In fact the data was the strongest in 3 years.
The Unemployment rate came in at a steady 5.8%.This data was decidedly upbeat for the economy as the pay roll numbers for earlier months were revised higher, buttressing the fact that the economy was stronger than expected.The job gains were across industries with almost all sectors in a hiring mode.
In another positive sign, the average hourly wage of American workers rose a strong 0.4% in November to $24.66 after two straight weak readings. Still, wages are only up 2.1% in the past 12 months, a rate thats barely changed since the recovery began in mid-2009.
The robust November numbers have raised another concern for the markets. And that concern is that it may tilt the neutral stance of the Fed to hawkish when it comes to raising interest rates. But the Fed likely won't be persuaded from just one robust report. They would like to see a series of such numbers before they decide to raise rates.
Crude oil prices suffered punishing losses on Friday as crude briefly cratered to a five-year low. Crude closed 1.7% lower to close below $66 a barrel .
As a result upstream oil companies suffered and user industries like airlines rose. Exxon Mobile fell 0.58%, Chevron tumbled 1.3%, BP slipped 1%. The Energy Select Sector ETF slid 1.2%.Airlines added to big gains achieved over the week with JetBlue up 0.66%, American Airlines climbed 2.7%, Delta Air Lines gained 1.9% and United Continental added 2.1%.
While the European Central Bank gave no hints at Thursday?s meeting about future stimulus, markets were convinced otherwise, with European stocks up 1%. That came even as the Bundesbank cut its German growth forecasts for this year and the next two years. The FTSE 100 rose 1%.
Chinese trading volume hit a record, with the Shanghai Composite Index closing up 1.3% in a wild day of trading. The index has gained nearly 10% this week. The Nikkei 225 index rose just 0.2%, but supported the dollar, which stayed above the key ?120 level.Oil prices continued to fall, with WTI crude settling at $66 a barrel and Brent under $70 a barrel after Saudi Arabia cut prices for U.S. and Asia oil, and analysts are waiting to see if other OPEC nations will follow. Gold prices fell 1.4%
On the New York Mercantile Exchange, crude futures for delivery in January dropped by 97 cents, or 1.5%, to settle at $65.84 a barrel, marking the lowest settlement for a front-month contract since July 29, 2009. The U.S. benchmark endured a weekly loss of 0.5% after being up for the week earlier Friday.
Meanwhile, January Brent crude on London?s ICE Futures exchange slumped 57 cents, or 0.8%, to $69.07 a barrel. This represented a 1.5% loss for the week and the lowest settlement since Oct. 7, 2009.
Crude prices tumbled because of two reasons :-
1. Saudi Arabia on Thursday, reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It also cut prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel.
2. Crude was also impacted by a stronger Dollar which strengthened after a market beating non-arm pay roll data of 3,21,000 job additions in November. A stronger buck often hurts commodities that trade in dollars, since that makes them more expensive for holders of other currencies.
When Saudi Arabia had cut prices for the U.S. markets alone earlier, the thinking was that it wants to shut down the shale gas units in the U.S
But now with the Saudis cutting prices for the Asian markets as well, it is clear that they are going for retaining their market share.
We believe that this scenario is ideal for India.
Our take on what the Government should do
The Government should not pass on the benefit for any further fall in crude prices to consumers. They should infact build a oil fund with that and buy long term options to secure lower prices for India?s crude purchases.
SAILs Rs 1,700-cr disinvestment successful
Five per stake sale in Steel Authority of India (SAIL) by the government, the first leg of this financial year?s disinvestment programme, received an encouraging response from investors on Friday. The Rs 1,700-crore offer for sale (OFS) was subscribed more than two times, while the portion reserved for retail investors - those investing up to Rs 2 lakh - was subscribed nearly three times.
According to investment banking sources, Life Insurance Corporation of India invested as much as Rs 700 crore, about 40 per cent of the issue. Other prominent investors included State Bank of India (Rs 150-200 crore), United India Insurance (Rs 15 crore) and ICICI Bank (Rs 100 crore). The issue also saw participation from Hong Kong-based fund Segantil Capital Management ($15 million) and New-York based Geosphere Capital Management ($5 million).
The indicative price or the volume weighted average price of all valid bids, stood at Rs 83.9 for retail investors and Rs 83.44 for other investors, more than the floor price of Rs 83 set by the government.
Govt to consider 31 FDI proposals on Dec 16
The government will consider 31 foreign investment proposals, including that of Ratnakar Bank, Novartis Healthcare and other leading private sector banks, on December 16th.Of the 31 items on the agenda, nine are those on which the foreign investment promotion board (FIPB) had deferred a decision in its earlier meetings.
While India allows FDI in most of the sectors through automatic route, approval of the Foreign Investment Promotion Board (FIPB) in the Finance Ministry is required in certain sectors like pharmaceutical and defence, considered sensitive for the economy.
Coal India seeks returns of two cancelled Odisha blocks
State-run monopoly Coal India Ltd has sought returns of two coal blocks in Odisha that it lost following Supreme Court's September order quashing the allocation of 214 blocks. The blocks in the Ib Valley and Talcher were owned by Coal India in joint ventures with private companies.
We have requested the government to allot CIL these two blocks because substantial investment has already been made by all parties in these two blocks. "If it comes back to Coal India, which is legally possible, the project can run unhindered
Aurobindo completes $132.5-m Natrol acquisition
Aurobindo Pharma has completed the acquisition of nutritional
supplement maker Natrol Inc.The US arm of the Hyderabad-based company had last month won a bankruptcy auction for the firm with its bid of $132.5 million.The assets have been acquired under a wholly-owned subsidiary, Nature Acquisition LLC, and since changed to Natrol LLC.
SpiceJet board to meet today
Amid growing concerns over the deteriorating financial health of no-frills carrier SpiceJet, the airline's board is set to meet today to discuss measures to recapitalize the airline.The meeting comes at a time when the Directorate General of Civil Aviation (DGCA) has directed SpiceJet to prepare a payment plan by December 15th to pay about Rs 1,600 crore, according to DGCA sources, which it owes various vendors and suppliers. No timeline has been specified to make the outstanding payments at present.Out of Rs 1,600 crore, SpiceJet owes Rs 700 crore to lessors, Rs 400 crore to other vendors, Rs 100 crore to the income-tax department, Rs 200 crore to the Airports Authority of India (AAI) and Rs 80 crore to other airport operators.
Founders of India IT firm Infosys selling shares worth $1.1 billion
Four of the founders of Infosys Ltd are seeking to raise about $1.1 billion by selling stakes in the Indian IT outsourcing company.
The founders are offering 32.6 million shares in Infosys at a fixed price of 1,988 Indian rupees ($32) each, a 4 percent discount to Fridays close, the report said.
U.S. Markets Enthused by Buoyant Pay Roll Data
Key U.S. Indices closed at new highs Friday, buoyed by the higher than expected Non-Farm Pay Roll numbers. Better-than-expected jobs data was able to cushion the broader market against the blows of sliding oil.
The Dow Jones Industrial average rose 59 points or 0.33% to close at
17,959. The S&P 500 added 3 points or 0.15% to its Thursday score to close at 2,075. Both the benchmarks closed at new all time highs. It was the seventh consecutive weekly rise for them.
The Nasdaq Composite added 12 points or 0.24% to close at 4,781, but that wasn?t sufficient to make the tech heavy index close the week in the green.
November Non-Farm Pay Roll numbers came in stronger than expected at 3,21,000 jobs. The consensus estimate was a 2,35,000. The number was way higher than the 2,14,000 jobs added in October. In fact the data was the strongest in 3 years.
The Unemployment rate came in at a steady 5.8%.This data was decidedly upbeat for the economy as the pay roll numbers for earlier months were revised higher, buttressing the fact that the economy was stronger than expected.The job gains were across industries with almost all sectors in a hiring mode.
In another positive sign, the average hourly wage of American workers rose a strong 0.4% in November to $24.66 after two straight weak readings. Still, wages are only up 2.1% in the past 12 months, a rate thats barely changed since the recovery began in mid-2009.
The robust November numbers have raised another concern for the markets. And that concern is that it may tilt the neutral stance of the Fed to hawkish when it comes to raising interest rates. But the Fed likely won't be persuaded from just one robust report. They would like to see a series of such numbers before they decide to raise rates.
Crude oil prices suffered punishing losses on Friday as crude briefly cratered to a five-year low. Crude closed 1.7% lower to close below $66 a barrel .
As a result upstream oil companies suffered and user industries like airlines rose. Exxon Mobile fell 0.58%, Chevron tumbled 1.3%, BP slipped 1%. The Energy Select Sector ETF slid 1.2%.Airlines added to big gains achieved over the week with JetBlue up 0.66%, American Airlines climbed 2.7%, Delta Air Lines gained 1.9% and United Continental added 2.1%.
While the European Central Bank gave no hints at Thursday?s meeting about future stimulus, markets were convinced otherwise, with European stocks up 1%. That came even as the Bundesbank cut its German growth forecasts for this year and the next two years. The FTSE 100 rose 1%.
Chinese trading volume hit a record, with the Shanghai Composite Index closing up 1.3% in a wild day of trading. The index has gained nearly 10% this week. The Nikkei 225 index rose just 0.2%, but supported the dollar, which stayed above the key ?120 level.Oil prices continued to fall, with WTI crude settling at $66 a barrel and Brent under $70 a barrel after Saudi Arabia cut prices for U.S. and Asia oil, and analysts are waiting to see if other OPEC nations will follow. Gold prices fell 1.4%
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