Gold prices hold Rs 51,000 level, silver slips below Rs 68,000 ahead of Fed meet outcome

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold and silver prices continued their downward journey on Wednesday even as Russia’s invasion of Ukraine continued amid hopes of talks.

MCX gold April contract was down 34 percent at Rs 51,390, while silver was trading 57 percent down at Rs 67,938. Gold prices in India had hit Rs 55,000 mark on March 9 for the first time in over one-and-half-year.

“For today we are expecting a negative trade may emerge. Traders can go for sell in gold around Rs 52,000 to Rs 52,100 levels with the stoploss of Rs 52,400 for the target of Rs 51,200 levels. They can also go for sell in silver at Rs 69,000 to Rs 69,200 levels with the stoploss of Rs 69,700 for the target of Rs 67,500 levels,” said Anuj Gupta, VP-Research at IIFL Securities.

Amit khare, AVP- Research Commodities at Ganganagar Commodity, said,”Gold and Silver charts are showing some profit booking and trading at overbought zone and making a top, Profit booking may continue in bullions at higher side, Momentum indicator RSI also indicating the same in hourly as well as daily chart, So risky traders are advised to create fresh short positions near given resistance levels.”

khare said traders should focus important technical levels given below for the day:

“April Gold closing price Rs 51,564, Support 1 – Rs 51,000, Support 2 – Rs 50,500, Resistance 1 – Rs 51,800, Resistance 2 – Rs 52,200. May Silver closing price Rs 68,325, Support 1 – Rs 67,700, Support 2 – Rs 67,000, Resistance 1 – Rs 68,600, Resistance 2 – RS 69,300.”

On Tuesday, MCX gold prices corrected by 1.41 percent and closed at Rs 51,564 level. In the international markets, comex, it was trading at $1923 levels.

Silver price also corrected by 0.75 percent and ended at 68,325 levels, while in the COMEX it was trading at $25.14.

The expectation of an increase in the interest rate by the US Fed in the upcoming meeting put pressure on the bulliins. Positive talks between the warring countries may also curb the yellow metal demand.

Oil prices rose more than $1 on Wednesday, bouncing back after earlier declines, as Russia’s invasion of Ukraine continues to stoke volatile trading with ceasefire talks the latest market trigger. Brent futures were up 97 cents, or 1 percent, at $100.88 a barrel at 0503 GMT. US West Texas Intermediate (WTI) crude rose 45 cents, or 0.5 percent at $96.89 a barrel. Both contracts had earlier declined more than $1 a barrel, with Brent falling to $98.86 a barrel and WTI easing to $94.90 a barrel earlier in the session.

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Zomato vs Jubilant Food: Market guru Deven Choksey shares his views and preference

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As investors continue to batter newly-listed stocks of new-age companies -with some hitting fresh lows – market veteran Deven Choksey in interaction with CNBC-TV18 stressed the need to know the profitability of such businesses. “One wants to definitely understand the proposition under which the business will start making a profit,” he said.

Choksey of KRChoksey was referring to food delivery startup Zomato, whose board approved a loan of up to $150 million (around Rs 1,145 crore) to Blinkit (Grofers).

The remarks from the market expert come on a day Zomato shares hit a fresh 52-week low of Rs 75.6 on BSE, breaching its earlier low of Rs 75.8 (February 15). At this level, the Zomato stock changed hands below its issue price of Rs 76.

Many experts have time and again questioned the valuations demanded by new age or platform companies, which have gradually lost investors’ interest.

Choksey of KRChoksey said he is “always very keen to understand from the company as to whatever business they are doing and where exactly they see this business generating profits for them”.

New-age companies such as Zomato are yet to make profits.

“In the case of Grofers also, we need to know how exactly this distribution company could probably bring money to Zomato. Doing a share swap bill and doing a merger is fine, you’re creating a new vertical in the company. That’s absolutely acceptable,” he said.

“If you get that clarity, then the confidence is higher, otherwise, as a customer, one can enjoy their services, but not as an investor investing,” said Choksey.

Newly-listed new-age companies including Zomato began 2022 with a mixed bag of earnings. For the quarter ended December 2021, Zomato reported a net loss of Rs 63.2 crore despite an 8.6 percent year-on-year rise in revenue to Rs
1,112 crore.

Zomato has said the loan to Grofers will be at an interest rate of 12 percent per annum or more with a tenor of not more than one year. The loan, it said, will support the capital requirements of the company in the near term.

Last year, Zomato had acquired around nine percent in the digital grocery shopping company for $100 million (Rs 745 crore).

Profitability: Zomato vs Jubilant FoodWorks

Choksey cited the example of Jubilant FoodWorks – which operates Domino’s Pizza outlets in India. He said one of every two new stores turns into profit within one year.

“Jubilant FoodWorks has a relatively better ability to generate profits out of the stores that they create… That is where you get a relatively higher amount of confidence,” he said, comparing the QSR operator with Zomato.

He likes Jubilant FoodWorks among QSR stocks. Jubilant’s menu keeps changing, which is important in the space for a business to survive, and is doing “a smarter job,” he said.

Valuation-wise, however, the stock remains expensive, according to Choksey. The current valuation is getting corrected a bit, he said.

Jubilant FoodWorks shares rose as much as 2.2 percent to Rs 2,579.4.

“One will have to know the strategy from the new man at the top. Probably that could give more clarity… We would definitely want to see clarity emerge on the new strategy that the company would adapt hereafter,” he said.

Last week, Pratik Pota stepped down as CEO of Jubilant FoodWorks. Jubilant FoodWorks has started the process of identifying a successor.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IndusInd Bank shares up 4%; here’s why Morgan Stanley is ‘overweight’ on the stock

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of IndusInd Bank rose more than 4 percent on Wednesday. At 10:25 am, the banking stock was up 3.1 percent at Rs 923.8 on BSE.

The lender’s stock has outperformed the sectoral gauge. Nifty Bank was up 1.5 percent. IndusInd Bank was the top gainer on Nifty50 and Nifty Bank.

In the past week, the stock has gained 6 percent and Year-to-Date, it is up 4 percent. However, in the past three years, the scrip has generated a negative return of over 45 percent.

Also Read | Momentumisers: IndusInd Bank in focus; here’s why

Today’s upmove comes after Morgan Stanley said it has an ‘overweight’ recommendation on shares of IndusInd Bank with a target price of Rs 1,350.

The bank’s management remains watchful of higher commodity prices and is optimistic about its growth prospects, steady margin and better asset quality trend going ahead, the brokerage firm noted.

The management expected growth to accelerate as microfinance disbursements normalised, Morgan Stanley pointed out. It expects credit costs to normalise in FY23, the brokerage firm added.

Also Read | BoFA Securities positive on bank; HDFC Bank, ICICI Bank, IndusInd Bank among top picks

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India not violating sanctions on Russia oil deal but ‘think where you want to stand’: US

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The United States on Tuesday said India taking up Russia’s offer of discounted crude oil would not be a violation of American sanctions.

“Our message to any country continues to be that abide by the sanctions that we have put in place and recommended,” White House Press Secretary Jen Psaki said.

When questioned on the possibility that India could take up the Russian offer of discounted crude oil, Psaki said, “I don’t believe this would be violating that (sanctions).” She added that support for the Russian leadership is support for an invasion.

“But also think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact,” Psaki added.

India has not supported the Russian invasion of Ukraine and has repeatedly asked all stakeholders to resolve differences through dialogue. It has, however, not condemned the invasion of Ukraine and abstained from voting at the United Nations calling out Russia’s aggression.

While US officials have in recent weeks said that they would like India to distance itself from Russia as much as possible, they recognising its heavy reliance on Moscow for everything from arms and ammunitions to missiles and fighter jets.

India, which imports 80 percent of its oil needs, usually buys only about 2-3 percent from Russia. But with oil prices up 40 percent so far this year, the government is looking at increasing this if it can help reduce its rising energy bill.

“Russia is offering oil and other commodities at a heavy discount. We will be happy to take that,” a government official told Reuters.

On the other hand, Indian-American Congressman Dr Ami Bera has expressed disappointment over reports of India-Russia oil deal. “If reports are accurate and India makes this decision to buy Russian oil at a discounted price, New Delhi would be choosing to side with Vladimir Putin at a pivotal moment in history when countries across the world are united in support of the Ukrainian people and against Russia’s deadly invasion,” he said.

Click here for latest updates on Russia-Ukraine war

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Petrol, diesel prices remain unchanged on March 16; check fuel rates in your city

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Petrol and diesel prices remained unchanged on Wednesday, March 16, even as crude oil prices softened in the international markets after rising to unprecedented levels in the past month due to the Russia-Ukraine war.

Fuel is relatively cheaper in Guwahati, Lucknow, Gandhinagar and Delhi as state governments had brought down Value-Added Tax (VAT) on petrol and diesel following an excise duty cut by the central government last year.

On the other hand, the petrol price in Mumbai is the highest among the metro cities at Rs 109.98 per litre. Bhopal, Hyderabad and Thiruvananthapuram are the other cities where fuel prices are dearer.

Centre had announced an excise duty cut on petrol and diesel by Rs 5 and Rs 10, respectively, on the eve of Diwali last year. Following the decision, several states, mostly ruled by National Democratic Alliance (NDA) and allies also cut the VA) on petrol and diesel prices.

Opposition-ruled Punjab and Rajasthan also reduced VAT on petrol prices by Rs 11.02 and diesel by Rs 6.77. The impact of the combined reduction of taxes on fuel by the Centre and the state was as much as Rs 16.02 per litre and diesel by Rs 19.61 a litre in Punjab. In Ladakh, diesel saw most reduction as rates have come down by Rs 9.52 per litre. This is because of a cut in VAT on top of Rs 10 a litre fall in excise duty.

Following are the prices of diesel and petrol in some metro and Tier-II cities in the country:

1. Mumbai

Petrol – Rs 109.98 per litre
Diesel – Rs 94.14 per litre

2. Delhi
Petrol – Rs 95.41 per litre
Diesel – Rs 86.67 per litre

3. Chennai

Petrol – Rs 101.40 per litre
Diesel – Rs 91.43 per litre

4. Kolkata

Petrol – Rs 104.67 per litre
Diesel – Rs 89.79 per litre

5. Bhopal
Petrol – Rs 107.23 per litre
Diesel – Rs 90.87 per litre

6. Hyderabad

Petrol – Rs 108.20 per litre
Diesel – Rs 94.62 per litre

7. Bangaluru

Petrol – Rs 100.58 per litre
Diesel – Rs 85.01 per litre

8. Guwahati

Petrol – Rs 94.58 per litre
Diesel – Rs 81.29 per litre

9. Lucknow

Petrol – Rs 95.28 per litre
Diesel – Rs 86.80 per litre

10. Gandhinagar

Petrol – Rs 95.35 per litre
Diesel – Rs 89.33 per litre

11. Thiruvananthapuram

Petrol – Rs 106.36 per litre
Diesel – Rs 93.47 per litre

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Govt receives huge response to PLI for auto, auto components: Heavy Industries Minister MN Pandey

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government of India has received an overwhelming response to the production-linked incentive (PLI) scheme for automobile and auto components, said Union Heavy Industries Minister Mahendra Nath Pandey on Tuesday. The PLI scheme for the sector has been successful in attracting a proposed investment of Rs 74,850 crore against the target estimate of investment of Rs 42,500 crore over five years, he added.

The scheme commencing from FY22-23 has an outlay of Rs 25,938 crore; however, it can be higher if needed in the future, Pandey added.

The approval granted by the government to 75 auto component manufacturers for incentives under the PLI scheme will act as a catalyst in the transformational journey from a conventional industry to a mobility industry, industry body ACMA said on Tuesday.

Also Read: Auto PLI will spur innovations, create global champions, says Baba Kalyani

Out of a total of 92 auto component manufacturers that applied, 75 have been approved for incentives under the production-linked incentive (PLI) scheme for five years, the Automotive Component Manufacturers Association of India (ACMA) said in a statement.

Recent policy announcements include the extension of the FAME-II scheme, PLI scheme on ACC battery and policy initiatives on battery-swapping and energy-as-a-service. ACMA said a total of 115 companies (auto and auto components) had filed their application. Of these, 20 have already been accorded approval for incentives in February 2022.

The 75 companies, which received approval from the government under the PLI scheme for the automobile and component industry, include the likes of Maruti Suzuki, Bharat Forge, Hero Motocorp, Bosch India among others. Those companies are expected to invest close to Rs 30,000 crore under the ‘Component Champion Incentive Scheme’.

With inputs from PTI

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Footfalls at 90-92% of pre-COVID levels; seeing good Holi season: V-Mart Retail

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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V-Mart Retail on Wednesday said that the company’s footfalls are back to 90-92 percent of the pre-COVID levels with aspirational consumption seeing a strong bounceback.

In an interview with CNBC-TV18, Lalit Agarwal, founder and MD of V-Mart Retail, said that the company is seeing a good Holi season and also expects decent summer sales.

The company has taken a price hike of 18-20 percent for the spring-summer collection as input inflation still remains at elevated levels.

“There may be some impact of higher prices on demand,” said Agarwal.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Explained | Crypto Gas Wars: What are they and what is the way forward?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ethereum network is known for its extremely high transaction fees. These exuberant charges are often the result of gas wars. While the term might sound like some sort of chemical warfare, it is merely a bidding battle to get your transaction processed ahead of others.

Transactions on a blockchain are verified by a network of nodes. This is the central premise of a blockchain-based structure. However, sometimes due to high volumes of transactions taking place simultaneously, the validators have to prioritise transactions.

A gas war is basically an auction system designed to prioritise transactions that are going to be validated in an upcoming block. Users can attach additional priority fees to the base gas fee (transaction fee) to prioritize their transactions. The higher the priority fee, the higher the chance of your transaction getting processed ahead of others.

What are gas fees and priority fees?

In the proof-of-work consensus model, validators dedicate vast amounts of computational power to verify transactions, bundle them into a block and add them to the network. Validators are rewarded with tokens as fees from users for processing their transactions. This is the base fee and is often referred to as gas fees.

Also read: Whale holdings in Cardano’s ADA token hit record high—what it means for the network

Sometimes there are several transactions waiting to be processed. However, as there are only a limited number of validators in the network, and not all transactions can be processed at the same time. This puts validators in a dilemma — which transactions should they process first? All transactions cannot be validated simultaneously, as the energy cost for miners would be exceedingly high.

This is why blockchain has developed a system where users looking to complete their transactions faster can offer a ‘priority tip’ on top of a base fee. The priority fee gives an incentive to a validator to add a particular transaction in the blockchain first. The user has free reign as to how much s/he wants to tip to get the validators to process their transaction faster.

This is especially important in blockchain networks like Ethereum, which has more than three thousand decentralised applications (also known as dApps) currently running on it. And the users of all these apps could all be transacting at the same time.

Also read: All about ‘Russian Ethereum’ that has skyrocketed 200% since Ukraine war

During such high-congestion periods in the network, multiple transactions are waiting for validation. Users who don’t want to miss the opportunity to seal their transaction in an upcoming block are known to pay significantly more than the base amount.

While the priority fee is utilized in day-to-day transactions on the Ethereum network, they hold the most prevalence in the sales of non-fungible tokens or NFTs. If there are a limited number of NFTs from an artist, buyers need to prioritise their transactions if they do not want to lose the opportunity to buy the NFT. This basically creates a bidding war among prospective buyers.

In rare cases, these gas wars or bidding wars have managed to pull more money from the buyer than the actual price of the asset being sold. For example, when Time magazine sold a limited number of NFTs for 0.1 ETH each in September 2021, some buyers allegedly spent four times as much on gas as they did on the tokens themselves.

Ethereum 2.0 may be a solution to gas wars

Ethereum has been in the process of transitioning to the proof-of-stake (PoS) mechanism. The transition is expected to complete by the end of 2022. This shift will end the PoW mining process that is energy extensive and will allow validators to validate transactions more quickly.

Also read: Global gold-backed crypto mcap surpasses $1 billion, nears all-time high

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget Session 2022 Highlights: Won’t waste a single day, Mann promises Punjab after being sworn in as CM

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bhagwant Mann was sworn-in as Punjab Chief Minister on Wednesday as elaborate arrangements were made for his oath-taking ceremony at Khatkar Kalan — ancestral village of legendary freedom fighter Bhagat Singh in Shaheed Bhagat Singh (SBS) Nagar district. Delhi Chief Minister Arvind Kejriwal and other senior party leaders took part in the swearing-in ceremony. The Aam Aadmi Party romped home winning 92 seats in the 117-member Punjab Assembly, decimating the Congress and the SAD-BSP combine. Mann had invited the people of the state to attend his oath-taking ceremony, saying it’s not he alone, but 3 crore people of Punjab will also take oath with him. He had also urged men to wear ‘basanti’ (yellow) colour turbans and women to wear basanti ‘dupatta’. Officials said full-proof security arrangements were made for the ceremony and several senior officials, including Inspector General and Senior Superintendent Police rank officers, have been deputed for the event. Around 8,000 to 10,000 security personnel were deployed for the event, said the officials. The venue was spread over 50 acres of land with another 50 acres earmarked for parking of vehicles, said the officials.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Opening Bell: Indices open higher with Nifty above 16,900 amid positive global cues

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmark indices opened higher on Wednesday with Nifty above 16,900 amid positive global cues buoyed by easing oil and commodity prices supporting global market recovery. Investor focus will remain on US Federal Reserve’s policy outcome later today.

At 9:15 am, the 30-scrip Sensex opened at 56,555.33 points, up 778.48 points or 1.40 percent higher. While the Nifty opened at 16,900.10, up 237.10 points or 1.42 percent higher.

HDFC, IndusInd Bank, Axis Bank, Maruti, ICICI Bank, Bajaj twins and Wipro were the top gainers leading the upmove on Sensex. Tata Motors was the additional gainer on Nifty. Sun Pharma, Cipla, and ONGC were among the major losers on the indices.

The broader markets were also in green, with the BSE MidCap and SmallCap indices trading up to 1.4 percent higher.

Among sectoral indices, Nifty Bank was trading over 2 percent higher. Auto, IT, PSU Bank, Realty, Consumer Durables were all trading over 1 percent higher. India VIX – the fear gauge slipped in the red.

Investors are also keeping a keen eye on the current Russia-Ukraine talks, which have yet to yield any significant results.

While the two sides will continue their discussions today, US President Joe Biden is expected to attend NATO and EU summits in Brussels next week, according to sources. This comes after Russia placed sanctions on Biden and other US officials on Tuesday, prohibiting them from entering the country.

Oil prices rose early on Wednesday, bouncing back after earlier falling more than $1 a barrel, as Russia’s invasion of Ukraine continues to dominate volatile trading with ceasefire talks the latest market trigger.

Brent futures were up 83 cents, or 0.8 percent, at $100.74 a barrel at 0120 GMT. U.S. West Texas Intermediate (WTI) crude rose 58 cents, or 0.6 percent, at $97.02 a barrel.

Global Stocks

Asian share markets rose on Wednesday on a rebound in battered Chinese stocks and ahead of a closely-watched meeting of the US Federal Reserve, while oil prices remained volatile as investors weighed the outcome of peace talks on Ukraine.

US stocks rallied on Tuesday and the S&P 500 ended a 3-day skid as another drop in oil prices and a softer-than-expected reading on producer prices helped ease inflation fears among investors, with the focus turning to the Federal Reserve’s upcoming policy announcement.

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Track all the live updates on the ongoing Russia-Ukraine crisis here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow