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Week ended 29th April, 2011 – Markets this week .


There were better GDP figures for South Korea , UK but disappointment for U.S. as their GDP growth decreases . South Korea’s factory output also increases , but higher fuel & commodity prices are creating pressure on their economy . On the other side  Russia , Vietnam and Colombia  have increased their interest rates to control the inflation . Japan’s sovereign rating has been downgraded by S&P , it also downgraded the auto makers of  quake hit Japan , so auto makers were in trouble at the beginning of this week .



INDEX
29th-Apr-2011
4/22/2011- 4/29/2011
4/15/2011- 4/22/2011
DOW
12810
2.43%
1.32%
FTSE
6069
0.84%
0.36%
CAC
4106
2.11%
1.18%
DAX
7514
3.00%
1.62%
NIKKEI
9849
1.72%
0.94%
HANG SENG
23720
-1.73%
0.54%
AUS
4823
-1.83%
1.25%
SHANGHAI
2911
-3.28%
-1.31%
SENSEX
19135
-2.38%
1.11%
BOVESPA
66132
-1.38%
0.56%
RUSSIA
7026
-3.18%
1.10%
INDONESIA
3819
0.47%
1.90%
KOSPI
2192
-0.22%
2.66%
STRAITS
3179
-0.46%
1.30%
THAI
1093
-1.08%
1.93%
ARGENTINA
3406
-0.20%
0.94%
S. AFRICA
32836
0.54%
0.71%



Most of the Emerging markets gave negative closings this week , where Developed markets gave positive closings. Inflation and hike in interest rates are the main causes of this negative performance of Emerging markets .  

On last 6 weeks Dow gave positive closings in 5 weeks , where as Shanghai Composite gave positive closings just for 3 weeks . During last couple of weeks Chinese markets are very much effected by the inflation and appreciation of Yuan . Investors and traders are discounting the matter that Government is ready to appreciate Yuan for controlling the inflation . On the other hand South Korean Government are trying to stop the appreciation of their currency. This week DAX index has rises quite lot. Germany is very much benefited by troubles in both Euro area and also in U.S.



Oil & Metal markets

Venezuela’s government will increase minimum wage by more than 25% to fight against the inflation which is around 27% . This sounds good for many million people in the Oil producing country, which is getting much profits  due to higher Oil price .


COMMODITY
29th-Apr-2011
4/22/2011- 4/29/2011
4/15/2011-4/22/2011
Nymex  (June)
113.93
1.46%
1.87%
Brent Crude (June)
125.89
1.53%
0.43%
Natural Gas  (June)
4.698
5.19%
4.73%
Gold (June)
1556.4
3.55%
1.14%
Silver (June)
48.59
5.46%
8.19%
Copper (June)
417.25
-5.38%
3.31%



Oil is still trading at 106-114 level , but last day it was close to end above 114 . Crude Oil price rose to a two and half  year high. Brent Crude is getting resistance at 126 level , if it breaks 124 in lower side , then it will be looking for  it’s support at around 120 level.
I was talking about building reservoirs for those countries who are importing Oil in this price, to save themselves from short-term movement of Oil prices. In fact many countries have these type of  stock reservoirs .
 Gasoline price rose for 7th straight days, as such it is making things more complicated .
If we make a comparison between Gasoline price and Dow Jones , then we can understand how much gasoline price has increased this week .

It is effecting much to the general people’s purchasing power .
Silver hit it’s all time high of $49.79 , there were an increased demand from Asia . I read somewhere that some countries better to say Central banks are secretly buying Silver . Though there is also a rumor in the market that some vested groups are trying to corner the Silver . Supply of Precious metals are not unlimited , so many things can happen .
There is a growing expectation that China which hold more than $3 trillion foreign currency may invest some of it into precious metal . China already has 1.6% of it’s reserve in Gold .
Gold rose to another record level after gaining for 6th weeks in a row. In spite of higher prices of Gold some investors are preferring Gold even in this price in place of U.S. Treasuries . I think in coming week we may see some correction in Gold’s price .

In spite of giving negative closing in last 10 days out of last 14 days , I am not sure about Copper’s up move from here . It is now close to completion of a pattern . Chart says there is more decreases in it's price due  to come  .



Markets in coming weeks


Last week I was talking about Dow’s breaking of 12800 , this week it broke the 12800 level with high volume. In spite of that lower GDP numbers and decreasing USD this type of move looks to me that somebody is trying to expand it by force .

If  I do not think about these economical  things then last day’s high volume move was very positive and from here it can only move in the up side, then it’s next resistance is around 13200 level . But I will be looking for some corrections from here in spite of high volume move in the last day .

Talking about the high volume , last week Shanghai Composite also gave high volume move but as I was predicting that inflation and appreciation in currency will not support this move . So unless this inflation fever is out of the window , I do not think that investors will be so courageous to show any new aggressions . But if it rises then it will again find the resistance of 3000 level .

Last week I was expecting that Dax index will be going up if comparison comes between U.S. and Germany now . DAX has almost same movement this week like Dow.  If it carries it’s move from here then it may find resistance around 7720 level .
Bovespa did not able to break 67000 level this week . Chart pattern says that it may correct little more , may be around 64000 .


Reports due this week – 

Monday 2nd May,2011 – ISM Mfg Index , Construction Spending .

Tuesday 3rd May,2011 – Auto Sales , Factory Orders

Wednesday 4th May,2011 – ADP job report , ISM Non Mfg. Index

Thursday 5th May,2011 – Unemployment Claims

Friday 6th May,2011 – Employment Report for April .



Talking about the U.S. economy weaker GDP data and job reports are the indicators that US economy is not recovering much . If we see recent reports , GDP increases at 1.8% in the first quarter of year 2011 than 3.1% in last quarter of 2010 , lower from economist expectations. Government purchases , Residential construction  fell. Household purchase rose at 2.7% , in last quarter it was 4% . Due to gasoline price , for the first time in a month Consumer Confidence fell in last week . New application for Jobless benefits rose last week , Unemployment benefits  also rises this week . Though different picture came from Pending sales of Existing homes , which rose 5.1% . Consumer spending rose by 0.6% in march, this is a rise of straight 9 months . Though I am not an economist but I think that higher inflation has a part in this rising consumer spending .

So, do all these recent reports reflect any better picture yet  !




NOTE :  Please see the disclaimer below this blog .




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