Commodities Daily Report

Wednesday| March 20, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Wednesday| March 20, 2013

International Commodities
Overview
US Building Permits increased to 0.95 million in February. Indias RBI cut the repo rates & reverse repo rates by 25 bps each. German ZEW Economic Sentiment increased to 48.5-mark in March. UKs Consumer Price Index (CPI) increased by 2.8 percent in February. US Building Permits increased to 0.95 million in February as against a rise of 0.90 million in January. Housing Starts was at 0.92 million in last month from rise of 0.91 million a month ago. Indias Reserve Bank of India (RBI) cut the repo rates by 25 bps points to 7.5 percent from 7.75 percent in the month of March. Reverse repo rates were also cut by 25 bps points to 6.5 percent as compared to 6.75 percent in the current month. Cash Reserve Ratio was kept unchanged at 4 percent for the same period. US Dollar Index (DX) appreciated by 0.8 percent in the yesterdays trading session on the back of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Additionally, Cyprus parliament failed to pass the proposal of levying tax on bank deposits which led to expectations of worsening the Euro Zone debt crisis. Further, US equities traded on a negative which also acted as a favorable factor for the DX. The currency touched an intra-day high of 83.315 and closed at 83.211 on Tuesday. The Indian Rupee depreciated by 0.8 percent in yesterdays trading session. The currency depreciated on the back of withdrawal of support to the Congress leading UPA government by the DMK. Additionally, weak global market sentiments coupled strength in the DX also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned on account of cut in interest rates by the central bank of the country along with selling of dollars from exporters. The Indian Rupee touched an intra-day low of 54.52 and closed at 54.49 against dollar on Tuesday. For the month of March 2013, FII inflows totaled at Rs.7,148.80 crores ($1,311.02 million) as on 19th March 2013. Year to date basis, net capital th inflows stood at Rs.53,647.0 crores ($9,945.60 million) till 19 March 2013. UKs Consumer Price Index (CPI) increased by 2.8 percent in February as against a rise of 2.7 percent in January. Producer Price Index (PPI) Input rose by 3.2 percent in last month from rise of 1.3 percent in January. Core CPI remained unchanged at 2.3 percent in the month of February.

Market Highlights (% change)

Last INR/$ (Spot) 54.49 Prev day -0.8

as on 19 March, 2013 w-o-w -0.6 m-o-m -0.7 y-o-y -7.9

$/Euro (Spot)

1.2881

-0.6

-1.2

-3.8

-2.7

Dollar Index NIFTY

83.21

0.8

0.7

3.3

4.7

5746.0

-1.5

-2.8

-3.3

8.9

SENSEX

19008.1

-1.5

-2.8

-3.2

3.9

DJIA

14455.8

0.0

0.0

3.8

9.2

S&P

1548.3

-0.2

-0.3

1.1

9.8

Source: Reuters

The Euro depreciated by 0.6 percent in yesterdays trade as the Cyprus parliament rejected the proposal of levying taxes on the bank deposits. Further, weak global market sentiments, decline in Euro region economic sentiments along with strength in DX added downside pressure on the currency. However, rise in German ZEW economic sentiments cushioned the sharp fall in Euro. Italian Industrial Production rose by 0.8 percent in January as against a decline of 0.2 percent a month ago. German ZEW Economic Sentiment increased by 0.3 points to 48.5-mark in March from earlier rise of 48.2-level in February. European ZEW Economic Sentiment fell by 9 points to 33.4-level in current month as compared to previous rise of 42.4-mark in February. The Euro touched an intra-day low of 1.2843 and closed at 1.2881 against dollar on Tuesday.

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Commodities Daily Report

Wednesday| March 20, 2013

International Commodities
Bullion Gold
Spot gold prices increased by 0.5 percent in the yesterday trading session on the back of worries over Cyprus bailout as the Cyprus parliament rejected the euro zone proposal of levying taxes on the bank deposits, driving investors to buy gold as safe haven . However, strength in DX capped sharp gains in prices. The yellow metal touched an intra-day high of $1615.16/oz and closed at $1612.79/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session on the back of depreciation in the Indian rupee and closed at Rs.29871/10 gms after touching an intra-day high of Rs. 29889/10 gms on Tuesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1612.8 Prev. day 0.5 as on 19 March, 2013 WoW 1.3 MoM 0.5 YoY -3.0

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13)

Rs/10 gms $/oz

29625.0

0.3

0.7

-0.4

6.6

1610.8

0.4

1.1

0.2

-3.1

$/oz

1611.3

0.4

1.4

2.1

-3.3

Rs /10 gms

29871.0

1.1

1.4

-0.6

7.1

Silver
Taking cues from rise in gold prices, spot silver prices ended on positive note by 0.1 percent on Tuesday. However, weak global market sentiments coupled with strength in DX capped sharp upside movement in the prices. The white metal prices touched an intra-day high of $29.08 /oz and closed at $28.87/oz in yesterdays trade. On the domestic front, prices ended on a positive note by 0.7 percent and closed at Rs. 54707/kg after touching an intra-day high of Rs. 54810/kg on Tuesday. Depreciation in the Indian rupee supported prices to trade green. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 28.9 54970.0 Prev day 0.1 0.4

Source: Reuters

as on19 March, 2013 WoW -0.8 -0.6 MoM -1.9 -3.6 YoY -12.1 -3.1

$/oz $/ oz

2885.0 2881.0

0.2 0.0

-1.4 -0.4

-3.8 0.4

-11.1 -9.4

Rs / kg

54707.0

0.7

-0.4

-0.8

-4.9

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of rise in risk aversion in the global market sentiments coupled with strength in DX. Further, Cyprus parliament rejected the proposal of levying taxes on the bank deposits which led to concerns over the Euro Zone debt crisis will add further downside pressure. On MCX, depreciation in the Indian Rupee may cushion sharp downfall in prices. Investors will keep an eye on US FOMC Economic projections and FOMC statement. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 20, 2013 Support 1604/1598 29750/29640 28.75/28.60 54500/54200 Resistance 1617/1621 29980/30050 29.00/29.20 55000/55300

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| March 20, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 1.7 percent yesterday taking cues from Cyprus parliament rejected the proposal of levying taxes on the bank deposits which led to concerns for the Euro Zone debt crisis. Additionally, strength in the DX also exerted downside pressure on the crude prices. However, sharp downside in the prices was cushioned on account of unexpected decline in US crude oil inventories from API. Crude oil prices touched an intra-day low of $92.03/bbl and closed at $92.16/bbl in yesterdays trading session. On the domestic bourses, prices declined by 1.4 percent and closed at Rs.5010/bbl after touching an intra-day low of Rs.4997/bbl on Tuesday. Depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined unexpectedly by 413,000 barrels to 376.69 million barrels for the week ending on 15th March 2013. Gasoline inventories rose by 278,000 barrels to 227.41 million barrels and whereas distillate inventories dropped by 1.3 million barrels to 119.14 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to rise by 2.0 million barrels for the week ending on 15th March 2013. Gasoline stocks are expected to fall by 2.1 million barrels whereas distillate inventories are expected to drop by 0.8 million barrels for the same period. Outlook From the intra-day perspective, we expect crude oil to trade on negative note on the back of weak global market sentiments coupled with strength in the DX. Further, Cyprus parliament rejected the proposal of levying taxes on the bank deposits which led to concerns over the Euro Zone debt crisis will add downside pressure. Additionally, Expectations of rise in US crude oil inventories coupled with rising crude output from Saudi Arabia and Iraq may act as a negative factor. However, sharp downside in the prices will be cushioned on account of unexpected decline in crude oil inventories from API along with shutdown in pipeline in Libya. In the Indian markets, depreciation in the Indian Rupee may cushion sharp decline in prices on MCX. Technical Outlook valid for March 20, 2013
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl Support 91.70/91.00 5050/5010 Resistance 93.00/93.50 5120/5150
Source: Telequote

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 92.4 108.6 92.2 Prev. day -1.4 -1.0 -1.7 WoW 0.0 -1.0 -0.4

as on 19 March, 2013 MoM -4.4 -8.1 -2.4 YoY -14.5 -14.5 -14.7

$/bbl

107.5

-1.9

-2.0

-8.6

#N/A

Rs/bbl

5010.0

-0.9

-0.5

-3.8

-7.4
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.964 216.3

(% change)

as on 19 March, 2013

Prev. day 2.1 1.9

WoW 9.05 9.57

MoM 21.08 21.72

YoY 69.62 82.07

Source: Reuters

Technical Chart NYMEX Crude Oil

SSource: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Wednesday| March 20, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of worries over Cyprus bailout. Further, weak global market sentiments coupled with strength in DX added downside pressure on the prices. Additionally, mixed LME inventory data acted as a negative factor. However, rise in building permit data along with positive housing starts data cushioned sharp decline in prices. On the MCX, depreciation in the Indian Rupee cushioned sharp fall in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) Rs /kg 104.2 1.0 -1.8 -7.6 -7.5 $/tonne 1936.3 0.0 -2.3 -8.4 -15.0 Rs/kg 412.8 0.0 -3.6 -5.6 -5.1 $/tonne Last 7510.0 Prev. day -0.8 as on 19 March, 2013 WoW -4.1 MoM -4.3 YoY -12.5

Copper
Copper, the leader of the base metal pack decreased by 0.8 percent in yesterdays trade on the back of worries over Cyprus bailout. Further, weak global market sentiments coupled with strength in DX added downside pressure. Additionally, sharp rise in LME Copper inventories by 0.6 percent which stood at 547,025 tonnes kept the prices under pressure However, favourable economic data from US cushioned sharp downfall in prices. The red metal touched an intra-day low of $7486.25/tonne and closed at $7510/tonne yesterdays trading session. On the domestic front, prices ended on flat note and closed at Rs. 412.8/kg on Tuesday after touching an intra-day low of Rs 411.90/kg. Depreciation in the Indian Rupee prevented sharp fall in the prices on the MCX. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of expectation of worries over Cyprus bailout. Further, weak global market sentiments coupled with strength in DX will add downside pressure. Investors will keep an eye on US FOMC Economic projections and FOMC statement. On MCX due to depreciation in the Indian rupee sharp decline in the prices will be cushioned. Technical Outlook
Unit MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 20, 2013 Support 410/407 102.8/102 117/116.2 103.5/102.8 897/888 Resistance 416/420 104.2/105 118.6/119.5 105/105.8 911/920

LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc (3 month) MCX Zinc (Mar13)

$/tonne

16630.0

0.0

-2.2

-4.7

-12.6

Rs /kg

904.1

0.8

-2.1

-4.3

-5.3

$/tonne

2171.0

-0.3

-2.5

-8.9

3.1

Rs /kg

117.8

0.4

-2.3

-8.4

11.8

$/tonne

1920.0

0.0

-3.4

-10.8

-7.9

Rs /kg

103.5

0.8

-3.2

-10.5

-0.1

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 19 March 547,025 5,223,325 162,654 1,202,900 274,400
th

18 March 543,925 5,182,175 162,306 1,205,125 275,500

th

Actual Change 3,100 41,150 348 -2,225 -1,100

(%) Change 0.6 0.8 0.2 -0.2 -0.4

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| March 20, 2013

International Commodities
Important Events for Today
Indicator German PPI m/m Current Account Claimant Count Change MPC Meeting Minutes Unemployment Rate German 10-y Bond Auction Annual Budget Release Crude Oil Inventories FOMC Economic Projections FOMC Statement Federal Funds Rate Country Europe Europe UK UK UK Europe UK US US US US Time (IST) 12:30pm 2:30pm 3:00pm 3:00pm 3:00pm Tentative 6:00pm 8:00pm 11:30pm 11:30pm 11:30pm Actual Forecast 0.2% 7.9B -5.2K 0-0-9 7.8% 1.8M <0.25% Previous 0.8% 13.9B -12.5K 0-0-9 7.8% 1.66/1.2 2.6M <0.25% Impact Medium Medium High High Medium Medium High Medium High High Medium

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