The next test for markets is the US inflation print on Friday, which will provide clues about how aggressively the Federal Reserve must raise rates. The data are expected to show annual consumer-price gains of more than 8%.
Indian oil firms to compensate ethanol makers for higher energy costs: Reuters
Indian state fuel retailers have agreed to provide monetary relief to sugar mills and other producers of ethanol to compensate for high energy costs to boost biofuel production, according to a letter written by the companies to manufacturers.
India, the world’s third biggest oil importer and consumer, has expedited efforts to double ethanol blending with gasoline to 20% from the current 10% across the country from 2025/26.
The Indian government fixes the ethanol purchase prices for fuel retailers – Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp — every marketing year.
However, the fuel retailers have announced they will pay extra to ethanol manufacturers to compensate for high energy and power costs, a BPCL spokesman said.
The three state fuel retailers have announced the ‘relief scheme’ for June 1 to Nov. 30.
The companies will pay an additional 1,604 rupees ($20.62) per kilolitre for ethanol produced from sugar cane juice, and 1,493 rupees for B- heavy molasses and 1,179 rupees for ethanol produced from C-heavy molasses, the letter showed.
The B-heavy molasses juice has some sucrose content left in them for sugar production, whereas C-heavy molasses is a cane by-product that has no sugar content left in it.
For a kilolitre of ethanol produced from damaged foodgrains and rice, the relief is fixed at 2,337 rupees and 1,437 rupees, the letter showed.
Prime Minister Narendra Modi has pledged to achieve net-zero carbon emissions by 2070, and is encouraging industries to switch to cleaner options including renewable and biofuels to cut carbon footprint.
IMF says it is concerned by food, fertilizer export restrictions; welcomes India’s decision to relax ban on wheat exports
The IMF has said it was concerned by the use of food and fertilizer export restrictions by some nations which can exacerbate global price increases and market volatility and welcomed India’s recent decision to relax its originally announced ban on wheat exports and allow some shipments to proceed.
A senior International Monetary Fund official observed that some 30 countries have curtailed exports of commodity goods including food and fuel since the war in Ukraine began.
Jefferies’s Chris Wood rejigs India equity exposure; replaces HDFC with HDFC Bank
(Details here).
Too early for equity investors to fret about a weak monsoon season
The Indian Metrological Department (IMD) has forecasted a normal monsoon for calendar year 2022. In its second long-range forecast, IMD said that it expects rainfall during the current monsoon season to be 103% of the long-period average. For the fourth year in a row, the monsoon season is expected to be normal.
However, in a report dated 9 June, economists at Barclays said, “Despite an early start, the progress of monsoon has been tepid so far. Cumulative rainfall during 1-9 June was 41% below the long-period average (LPA), though it remains too early to draw any meaningful conclusions, given that it is still very early in the monsoon season.” (Read here)
M&M’s auto segment continues to maintain momentum
Shares of Mahindra & Mahindra Ltd (M&M) have risen by 24% so far in calendar year 2022 outperforming the sectoral index, Nifty Auto, which gained by only 4% in the same span.
The turnaround in M&M’s automotive segment has boosted investor sentiments. Also, the outlook is firm as the demand for its products such as XUV700 continues to grow. (Read here)
Fitch revises India outlook to ‘Stable’
Fitch Ratings on Friday revised its outlook on India’s long-term foreign currency Issuer Default Rating (IDR) to “Stable” from “Negative,” citing diminished downside risks to medium-term growth.
The ratings agency said risks to the country’s medium-term growth lessened due to rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock.
IT index worst hit among sectoral indices
Market view: ICICI Securities
We believe strong support for the Nifty is placed at 16100 zone. However, for a meaningful pullback to materialise the index needs to decisively close above past three session’s identical high of 16500 to extend the pullback towards last week’s high of 16800. Else, there will be prolonging of consolidation in the 16500-16100 range amid stock specific action
Alembic Pharma gets tentative approval from the @US_FDA for Dasatinib Tablets
Dasatinib is indicated for treatment of adult patients with i) newly diagnosed Philadelphia chromosome-positive (Ph+) chronic myeloid leukemia (CML) in chronic phase. ii) chronic, accelerated, or myeloid or lymphoid blast phase Ph+ CML with resistance or intolerance to prior therapy including imatinib. iii) Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL) with resistance or intolerance to prior therapy.
Dasatinib Tablets have an estimated market size of $1465 million for twelve months ended December 2021, according to IQVIA.
All Nifty sectoral indices in the red
Malaysia end-May palm oil stocks down 7.4% to 1.52 mln tn: Reuters
Malaysia’s May palm oil end-stocks fell 7.37% from the month before to 1.52 million tonnes, data from industry regulator the Malaysian Palm Oil Board (MPOB) showed on Friday.
Crude palm oil production edged down 0.07% from April to 1.46 million tonnes, while palm oil exports jumped 26.67% to 1.36 million tonnes, MPOB said.
A Reuters survey forecast end-May inventories to shrink 6% to 1.54 million tonnes. Production was seen falling 4% to 1.4 million tonnes. Exports was seen up 20% at 1.27 million tonnes.
Views on Gold: Pritam Patnaik, Head – Commodities, HNI & NRI Acquisitions, Axis Securities
The US inflation data, due today, is expected to set the tone for the US Fed’s next policy decision. While a 50 basis point is very much in the cards, the forward looking commentary for future action could be greatly influenced by today’s data.
While many have been peddling the possibility of the inflationary trend to be levelling out, today’s data will possibly validate or negate the same. Globally, the central banks seem to be operating in unison to stamp out inflation using interest rate hikes. The ECB announced on Thursday that it will prepare a quarter-point interest rate hike in July and suggested a bigger hike in the fall over long-lasting high inflation. The inflation in the Eurozone now exceeds 8%. The ECB also said that it will end net asset purchases on July 1, 2022.
This didn’t build confidence for the bullion bulls, resulting in small correction in prices . Rising US treasury yields didn’t help the cause either.
Gold dips as Treasury yields rise before U.S. inflation data release
Gold edged down on Friday and was set for a weekly fall, as Treasury yields rose, with investors awaiting key monthly U.S. inflation data for cues on the future of the Federal Reserve’s monetary policy.
Spot gold eased 0.2% to $1,844.78 per ounce, while U.S. gold futures eased 0.3% to $1,848.10.
Benchmark U.S. 10-year Treasury yields edged up, hurting demand for zero-yield gold.
Rupee hits record low of 77.82 against US dollar in early trade
The rupee depreciated 8 paise to a record low of 77.82 against the US dollar in opening trade on Friday, tracking the strength of the greenback in the overseas market.
At the interbank foreign exchange, the rupee opened on a weak note at 77.81 against the American dollar, then lost ground to quote at 77.82 — its all-time low level, registering a fall of 8 paise from the last close.
On Thursday, the rupee fell by 6 paise to close at 77.74 against the US dollar.
Asian and emerging market peers have started mixed, while Asian equity remained under pressure and could weigh on sentiments, Iyer noted.
Global oil benchmark Brent crude futures fell 0.66 per cent to USD 122.26 per barrel.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent lower at 103.17.
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Read More: Market LIVE: Sensex slumps 800 pts, Nifty below 16,250; metals, IT top drags