Gold holds below $1,200 as dollar hits new highs

U.S. dollar hit fresh highs against the euro on Monday, while the dollar index, which measures the greenback against a basket of six major currencies, hit its highest since April 2006


Gold on Tuesday traded firmly below $1,200 an ounce as the dollar was perched at a near nine-year high versus a basket of major currencies, undermining the metal's appeal as a hedge. FUNDAMENTALS Spot gold was little changed at $1,182.40 an ounce by 0019 GMT, after losing 1 percent on Monday. The U.S. dollar hit fresh highs against the euro on Monday, while the dollar index, which measures the greenback against a basket of six major currencies, hit its highest since April 2006. Also hurting gold was stronger equities. Shares edged higher in major markets on Monday, while crude oil prices tumbled after a short-lived bounce. The U.S. benchmark S&P 500 closed at a record high. Greek Prime Minister Antonis Samaras failed to get enough support for his presidential nominee and will call a national election for Jan. 25. Stocks in Athens plunged, while yields on 10-year Greek bonds touched their highest since September 2013. The news failed to trigger enough safe-haven bids for gold to offset the strength in the dollar. Bullion trading volumes were thin due to the Christmas and year-end holidays. Floor trading for CME Group's precious metals futures and options products will be closed on Jan. 1. In news from the physical markets, U.S. Mint American Eagle gold coin sales are on track to fall nearly 40 percent in 2014, the biggest drop in eight years. Gold coin sales reached 524,500 ounces in 2014 so far, down from 856,500 ounces in 2013, data on Monday showed. China's gold imports from Hong Kong in November rose to their highest level since February, indicating strong demand in the world's top bullion consumer ahead of the Lunar New Year.

See NSE stake sale in Q4; Co adequately capitalised: IFCI

The Union Cabinet yesterday approved infusion of Rs 60 crore in Industrial Finance Corporation of India (IFCI) Ltd to make it a government company by way of acquisition of preference shares from existing shareholder(s).

Malay Mukherjee, MD and CEO of  IFCI in an interview to CNBC-TV18 clarified that the government infusing Rs 60 crore in the company would not bring in cash into the company books but in fact government would be buying preference shares from some banks or existing shareholders to increase their stake in IFCI. The government would now hold 51 percent stake in IFICI, he added. The Union Cabinet yesterday approved infusion of Rs 60 crore in Industrial Finance Corporation of India (IFCI) Ltd to make it a government company by way of acquisition of preference shares from existing shareholder(s). Mukherjee also clarified that the company as of now is adequately capitalised and is not looking for any further capital infusion. Commenting on the 2.5 percent National Stock Exchange (NSE) stake sale, he said the company is currently in negotiations with a foreign fund and expects to close the deal in fourth quarter by January end or February. The company had got 2-3 bids earlier but the price was below their expectations. Tourism Finance Corporation of India (TFCI) for the company has always been a strategic investment and disposing of 2 percent stake was just to book some profitts They still hold 26 percent stake in the TFCI, said Mukherjee.

Mkt ranged; no instant gains from land ordinance: Badshah

Taher Badshah of Motilal Oswal AMC says from a one-year perspective, earnings will have to grow upward of 15% to push the market ahead. So the government reforms will have to fall into place for the desired 15% upward push to earnings, he adds.

Nifty is likely to remain fairly rangebound in the very near future, is the word coming in from Taher Badshah of Motilal Oswal AMC. The result or earnings season too will perhaps see just about double digit growth or maybe a little less than that, he adds. He believes there could be some sector surprises, maybe even negative surprises going ahead. Policy-driven measures and stocks benefiting from them are likely to be in focus, he adds. From a one-year perspective, earnings will have to grow upward of 15 percent to push the market ahead. So the government reforms will have to fall into place for the 15 percent upward push to earnings, he adds. On the government giving a go ahead to the ordinance route for Land Acquisition Act and companies like L&T ultimately benefiting from them, Badshah believes there are still some challenges ahead. Some of the projects are still in a limbo because of land acquisition issues, and for these projects to see the light of the day – that is still some time away, he says. "It is good to see the government’s conviction to push these reforms, but the market will have to see actual movement on the ground to bet on these companies," he adds.

May get Rs 600-700 cr for entire stake in CARE: IDBI Bank

K Batra, executive director and group head - corporate banking of IDBI Bank says the timing seems right to monetize a part or its entire stake in CARE. He believes the bank can get between Rs 600 crore and Rs 700 crore for its entire shareholding


The  IDBI Bank board has approved the sale of part or whole of its shareholding in CARE . The bank holds 48.18 lakh share or 16.62 percent in CARE. It is in talks with PE players and financial institutions to sell the stake. ChrysCapital, Baring PE Asia and Blackstone are likely to bid for the CARE stake. However, the formal bidding for the stake sale will begin by January 2015 and the process is likely to take place via a closed-bidding process. At current market price, IDBI Bank will get Rs 684 crore by selling its entire stake in CARE. BK Batra, executive director and group head - corporate banking of IDBI Bank says the timing seems right to monetize a part or its entire stake in CARE. He believes the bank can get between Rs 600 crore and Rs 700 crore for its entire shareholding. He says IDBI Bank is only looking at CARE and NSE stake sales at the moment.

Market unlikely to see new highs in 2015: Quantum Sec

Sanjay Dutt, director, Quantum Securities does not foresee a Budget-rally and neither does he think there will be new highs for the Indian equity market in 2015 because the macro issues for India still persists. He thinks 2015 could be a struggle for the market and a year of consolidation contrary to street expectations. However, individual stock opportunities do exist. According to him the Modi-rally or the sentiment driven rally is now over and so the market is vulnerable to correction to sub- 8000 levels. So, one now needs to focus on fundamentals and structural changes on the ground. Meanwhile, he is also not upbeat on the upcoming third quarter results and globally too thinks fifty percent of the markets are going through their own set of problems. So with backdrop of this kind of a landscape, the fundamentals for the Indian market may not change rapidly, says Dutt. Even the US market is set for a correction now, he thinks. Talking stock specific, he does not see an upside for realty stocks post the easing of land acquisition rules because it was already in the price.  However, one could see a trading upside of 5-10 percent in some stocks. He has no big bets from that space. One could look for individual stock opportunities in companies that have reacognised their problems and are now aggressively restructuring and are reorganising themselves.

India Inc raised USD 2.78 billion from overseas markets in October this year, up 44 percent from a year ago, according to the Reserve Bank data released today. Domestic firms had raised USD 1.93 billion the overseas market in the same month a year ago. Of the total borrowings during the month, USD 69.43 million was raised through the approval route, while  USD 2.71 billion came through the automatic route. As many as 56 companies raised money from automatic route while 3 firms raised funds via the approval route, the RBI data showed. In the approval route category, Indiabulls Housing Finance Limited raised USD 50 million for sub-lending, Roxul-Rockwool Insulation India Private Ltd USD 11.43 million for general corporate purpose and Cargill India raised USD 8 million for rupee expenditure. Under the automatic route, the major borrowers were  Tata Motors  raising USD 750 million for rupee expenditure and refinancing of earlier ECB and Reliance Jio Infocomm USD 750 million for rupee expenditure. Bharat Mumbai Container Terminals raised USD 494.53 million for port project and Larsen & Toubro borrowed USD 400 million for refinancing of earlier ECB and redemption of FCCBs. Among others,  Aditya Birla Nuvo  raised USD 42 million for refinancing of the earlier ECB; Srei Infrastructure Finance, USD 30 million for sub-lending, and Tata Hitachi Construction Machinery Co USD 39.14 million for general corporate purpose. RELATED NEWS

Ahmedabad-based Astral Poly Technik , a major player in CPVC pipes and fittings industry, today said it has acquired 76 per cent stake in Resinova Chemie Ltd (Resinova) for a deal value of Rs 212.8 crore. Astral Poly Technik has acquired 76 percent stake in Resinova Chemie for a total deal value of Rs 212.8 crore and transaction values Resinova at an enterprise valuation of Rs 289 crore, a company statement said. The company Resinova is into manufacturing and marketing of highly diversified range of adhesives and sealants and sells its products in approximately 50 brands. In August 2014, Astral had completed the acquisition of 80 percent stake in UK-based Seal It Services Ltd (Seal-It) which manufactures and sells a comprehensive range of sealants, adhesives, water proofing, cleaning products. Commenting on the transaction, Astral MD Sandeep Engineer said, "Astral has established itself as a strong participant in the CPVC pipes and fittings sector. In high-growth Indian adhesive market, the Resinova acquisition provides a strong platform which is highly complementary to Astral's strengths." This acquisition will synergise with Astral's existing businesses by deepening and widening its product offerings. Seal-It and Resinova will enable building a robust and valuable adhesive business, he added. Resinova MD Vijay Parikh said the strategic move between two fast growing companies in synergistic sectors has exceptional potential to develop the adhesive market in India. "Combined with Astral's presence in the international market, thrust will be on using technical strength and distribution network of both companies to harness the potential of this business," Parikh added.   Astral Poly Tec stock price On November 21, 2014, Astral Poly Technik closed at Rs 403.10, down Rs 4.05, or 0.99 percent. The 52-week high of the share was Rs 434.70 and the 52-week low was Rs 122.50. The company's trailing 12-month (TTM) EPS was at Rs 8.03 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 50.2. The latest book value of the company is Rs 28.01 per share. At current value, the price-to-book value of the company is 14.39.