Global Tensions & fluctuations in Commodity Prices

19th May - 25th May

MCX is in merger talks with the National Stock Exchange

May 25, 2018

According to a media report, MCX is in merger talks with the National Stock Exchange ahead of the implementation of the universal exchange framework in October. Shares of Multi Commodity Exchange surged on report of merger with NSE.

MCX shares jumped as much as 8 per cent, biggest daily percentage gain in over 2 months. Both entities plan to approach the Securities and Exchange Board of India as early as this month, the report added.

Source: Business line

Cotton exports for the year 2017-18 are likely to jump nearly 30 per cent from the year before

May 25, 2018

The country has exported 6.3 million bales so far in the marketing year that started on October 1 , he added. Each bale contains 170 kg of cotton.

Source: Business line

Precious metals rallied sharply higher on news that President Trump has cancelled a summit with North Korea

May 25, 2018

Bullion pushed prices higher on news that President Trump has cancelled a summit with North Korea with CME gold shooting above the psychological level of 1300.

The weakness in US dollar index also contributed to the strength in precious metals.

Source: Money control

OPEC members will step up production in the face of worries over supply from both Venezuela and Iran

May 24, 2018

Oil prices fell on Thursday on expectations that OPEC members will step up production in the face of worries over supply from both Venezuela and Iran.

Also surprise build up in crude oil inventories in the United States also weighed on prices, driving the spread between Brent crude and U.S. West Texas Intermediate (WTI) close to its widest in three years.

Source: Money control

Government of India step in to avert a full-blown crisis out of Higher Oil prices

May 24, 2018

Officials from the petroleum ministry have said that the government is looking to get the state-owned ONGC to sell it’s fuel below the current global price - which is $79.5 a barrel at the moment.

With fuel prices rising for the tenth consecutive day this morning, India’s government is finally stepping in to avert a full-blown crisis.

Rather than endangering the revenues it receives from taxes and duties on petrol, given its widening fiscal deficit, it is asking India’s largest gas and oil Exploration Company to take a hit

Source: Economic Times

Rising Oil: India’s crude oil import bill has increased consistently in the last three fiscal years

May 24, 2018

India’s crude oil import bill has increased consistently in the last three fiscal years and were oil prices to sustain higher, the trend shall continue.

The blow from rising crude oil prices is twofold. One, India’s crude oil import dependency is increasing.

The chart above shows the country’s import dependency of crude oil has increased to 83.7% for April 2018. The measure stood at 77.3% in fiscal year 2014 (FY14).

Indians are consuming more petroleum products and to compensate for our lacklustre local crude oil production growth, we will have to resort to imports. Unfortunately for us, this trend is not expected to change soon.

Source: Live Mint


May 24, 2018

The Indian stock market has outperformed global peers in the four years since the Narendra Modi-led National Democratic Alliance (NDA) government came to power. Abundant liquidity drove the domestic markets following the centre’s demonetization move.

In last 4 years of Modi government , benchmark indices Sensex and Nifty rose 38.95% and 41.73%, respectively. MSCI India rose 32.64%, MSCI Emerging Markets rose 9.6% and MSCI World 24.9%.

Source:Live Mint

Revision in Fuel prices may dent your budget

May 23, 2018

Over the time, this rising fuel prices may dent your budget by not only increasing your outgo for fuel but also essential commodities and other goods, apart from making foreign trips and loans costlier. Here are four things which can become costlier for you.

There was a pause in these revisions during the recent assembly elections in Karnataka, they have resumed thereafter. Not surprisingly, since June 2017, prices of fuel like petrol and diesel, that are directly linked to crude oil prices, are being revised on a daily basis

With the daily revision in prices, people might not always notice that your monthly fuel outgo is on the rise.

Source: Live Mint

NSE dragging the SGX to court for an interim injunction on the new products

May 23, 2018

NSE dragging the overseas bourse to court for an interim injunction on the new products. The leading Indian bourse is making an effort to stop SGX from launching derivatives which could replace its Nifty 50 index.

SGX has been notified by the National Stock Exchange of India (NSE) of an application made in the Bombay High Court for an interim injunction on our new products.

Source: mydigitalfc

Supply concern are pushing Crude: Inflation is a worry

May 23, 2018

Venezuela is already going through a political and currency crisis that has caused oil production to drop to a decade low of about 1.4 million barrels a day. The US sanctions are sure to further curb the country’s oil output.

The emerging situation points to the possibility of a further rise in oil prices. Without doubt, falling production in Venezuela has contributed to tightening of the global crude oil market. Despite availability of spare capacity elsewhere, other producers have not so far ramped up production.

Source: Business Line

RISING OIL PRICES: Taxes are around 100% of the ‘base price’ of petrol or half the retail price

May 22, 2018

Since the Centre’s excise duty on petrol and diesel are specific (quantity-wise), rather than ad valorem, it could, if at all, only lose revenue if prices skyrocket in sync with the global trend and hit consumption levels

The state governments, on the other hand, tend to gain immensely when prices soar thanks to the ad valorem value-added tax (VAT), sales tax, and additional cesses/surcharges levied by them on these fuels.

Source: Financial Express

U.S. was putting the trade war on hold

May 21, 2018

U.S. equity futures jumped in the wake of news that the Sino-American trade war is on hold for now. Treasury yields nudged higher, taking the dollar with them. Equity benchmarks rose in Hong Kong, China and Korea, while they were little changed in Japan and Australia.

FTSE 100 futures climbed with S&P 500 Index contracts. Oil futures rose. U.S. Treasury Secretary Steven Mnuchin said the U.S. was “putting the trade war on hold,” amid progress in talks with China. The euro touched fresh lows for the year after Italy’s two populist parties agreed on a prime minister.

Source: Bloomberg quint