Crude oil prices continue to remain high, IL & FS crisis spooks market sentiments & LIC’s assurance to keep IL & FS afloat
22nd Sept – 28th Sept
1. Copper and Zinc bounced as trade war softened
September 24, 2018
Copper and Zinc sharply recovered from the weekly lows as trade war fears softened. US tariffs on the list of products started from September 24 but the rate will increase to 25 per cent only by the end of 2018. US President Donald Trump announced an imposition of 10 per cent tariffs on about $200 billion worth of Chinese imports.
Source: mydigitalfc.com
2. Iran sanctions keeps oil prices on the higher side
September 24, 2018
US sanctions on Iran could lead to a loss of 1.5 million bpd ; US planned to put sanctions on Iran oil exports from Nov 4. Oil supply will be affected from Iran and OPEC has not agreed to increase supply in the near term. However, OPEC and Russia are in discussions for possibility of raising output by 500,000 bpd.
Source: Economic Times
3. Petrol prices touch new life high, above Rs.91/ per Ltr in Maharashtra
September 25, 2018
Petrol prices reached over Rs. 91 in several districts of Maharashtra, with Mumbai witnessing a jump to Rs 90.22 per litre. Diesel has been priced at Rs 78.69 in Mumbai. Brent crude oil, which has crossed $81 per barrel in the past four years, is the key reason behind it.
Source: Business Standard
4. Equity Market looks weak, Banks and NBFC’s are under selling pressure
September 25, 2018
IL&FS is the reason behind the sell-off in the equity markets, but factors such as rate hikes by the US Federal Reserve, crude oil prices, the rupee, and trade relations between the US and China will have a bearing on overall sentiments. Major losers were - Bajaj Finance, Indiabulls Housing Finance, Reliance Home Finance, Central Bank of India, Cholamandalam Investment & Finance Company, and Ujjivan Financial Services.
Source: Business Standard
5. IL&FS to raise Rs.300 billion to address the ongoing crisis
September 25, 2018
IL&FS is to raise Rs. 300 billion to address the ongoing crisis. RBI initiated an audit on IL&FS, which owns debt of ₹911 billion, and also banned the group from accessing the Commercial Paper market after a default on loan repayment - this was primary reason behind the sell-off in the market, but default rumours of DHFL along with DSP Mutual Fund selling NCD’s in the bond market at higher yields created panic and dragged its prices down by 42 percent by the end of the day.
Source: Business Standard
6. Bank of America predicts Gold to be above $1300/Ounce
September 25, 2018
As per Bank Of America reports, gold prices are projected to surge above $1300 over the next year on widening US budget deficit and US
tariff war against all major economies, including China and Russia. As per a report, Bullion could average $1,350 an ounce in 2019 as corporate
tax reforms worsen the US fiscal balance.
Source: Economic Times
7. President Trump’s pressure fails on OPEC, oil prices sky rocket
September 25, 2018
Oil prices rallied as global supply concerns mounted over U.S. sanctions on Iran’s oil exports. Brent Oil surges to a four-year high. U.S.
President Donald Trump called again on OPEC to boost crude output.
Source: Reuters
8. LIC will ensure that IL&FS will not collapse
September 26, 2018
LIC Chairman was quoted as saying that LIC will ensure that IL&FS does not collapse. LIC is looking into all options - they may increase the stake in the debt laden company to help it. IL&FS has debt of around Rs 91,000 crore, of which IL&FS Financial Services owes Rs 17,000 crore.
Source: Economic Times