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Steellong on ICEX settled up 1.56% at 32590 on short covering after prices dropped as inventories of construction steel in China have increased for seven straight weeks as construction demand dwindled two weeks prior to the Chinese New Year holiday. Rebar inventories at Chinese steelmakers stood at 2.37 million mt as of January 16, two weeks prior to the Chinese New Year holiday. This was up 5% from January 9, compared to a 3.7% rise last week. Production at some plants edged lower at year-end due to lower inventories of raw materials and smaller profits, which were caused by falling prices of high-grade NPI as downstream stainless steel prices weakened significantly. Handan, a major steelmaking hub in north China’s Hebei province escalated the smog alert from orange to red, the highest level in Beijing’s three-tier warning system for heavy air pollution. The alert will remain in place until further notice. This round of heavy pollution has prompted 72 Chinese cities across Beijing-Tianjin-Hebei and nearby regions, the Fenwei plain and the northern part of the Yangtze River Delta region to issue smog alerts since a week ago. NBS data also showed that industrial output in China rose 6.9% from a year earlier in December, the strongest growth in nine months and above an expected 5.9%, while retail sales climbed 8%. Fixed-asset investment rose 5.4% for the full year, but growth had plumbed record lows in the autumn. Technically market is under short covering as market has witnessed drop in open interest by -1.56% to settled at 821 while prices up 500 rupees, now Steellong is getting support at 32200 and below same could see a test of 31810 levels, and resistance is now likely to be seen at 32840, a move above could see prices testing 33090.
BUY STEELLONG 05FEB2020 @ 32550 SL 32450 TGT 32650-32750.ICEX
Diamond 1Ct on ICEX settled up 0.39% at 3571.5 as dealers focused on filling US orders as jewelers begin post-holiday inventory replacement. Signet Jewelers Nov.- Dec. revenue -1% to $1.8B. Rising expectations for Jan. 25 Chinese New Year as US and China sign trade deal. assessing their inventory requirements and continuing to focus on memo supply. Steady interest in engagement rings as Valentine’s Day promotions begin. Polished trading quiet due to holidays in China and India. Demand from local dealers for dossiers under 1 ct. Fewer overseas buyers than usual for this time of year. Rough buying improving but manufacturers still cautious about raising factory production. US diamond shipments fell in November, according to government data. Polished imports declined 19% as lower volumes outweighed an increase in the average price. China's GDP data came in line with expectations and there was growth in industrial output and retail sales, suggesting the world's secondbiggest economy ended the year on a firmer note. In the whole year of 2019, China's gross domestic product grew 6.1 percent, which was well within the target of 6- 6.5 percent. Technically market is under short covering as market has witnessed drop in open interest by -18.62% to settled at 33870 while prices up 14 rupees, now Diamond 1Ct is getting support at 3562 and below same could see a test of 3553 levels, and resistance is now likely to be seen at 3577, a move above could see prices testing 3583.
BUY DIAMOND1CT 05FEB2020 @ 3565 SL 3560 TGT 3571-3576.ICEX
Rubber on ICEX settled up 0.32% at 14134 as global output is projected to be lower due to a severe pest attack in major producing countries such as Thailand, Indonesia and Malaysia. Prices also seen supported driven by the announcement of the signing of the phase one US-China trade deal on January 15. Hot weather is preventing growers from getting a good yield. Trees have also started losing leaves which usually happens in summer. Rubber imports fell 18 per cent year-on year in April-October 2019, according to Rubber Board data. According to the Association of Natural Rubber Producing Countries, global natural rubber production in Jan-Jul fell 7.3% on year to 7.04 mln tn. There is a supply crunch in the market as rubber tapping activity has been halted due to recent showers in key growing areas of Kerala. The ITRC said 2019 rubber production was expected to fall by 800,000 tonnes due to an outbreak of the Pestalotiopsis fungal disease, erratic weather conditions and sluggish tapping activities after a prolonged spell of low prices. Technically market is under fresh buying as market has witnessed gain in open interest by 1.93% to settled at 794 while prices up 45 rupees, now Rubber is getting support at 14060 and below same could see a test of 13990 levels, and resistance is now likely to be seen at 14190, a move above could see prices testing 14250.
SELL RUBBER 14FEB2020 @ 14100 SL 14200 TGT 14000-13900.ICEX
BUY ISABGS 14FEB2020 @ 102 SL 100 TGT 103-104.ICEX
SELL PEPPER 14FEB2020 @ 348 SL 352 TGT 344-342.ICEX
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