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Apr
Gold plates are displayed for the media inside a Bank of Taiwan branch outlet in Taipei April 21, 2011.
Credit: Reuters/Nicky Loh
LONDON |
LONDON (Reuters) - Gold steadied on Friday, just shy of fresh record highs and set for its seventh successive weekly gain, driven largely by the decline in the dollar to its lowest in nearly three years.
The dollar fell to its lowest since July 2008 against a basket of major currencies, after data this week painted a picture of an economy with slower growth and higher inflation, and after the Federal Reserve signalled it would not tighten monetary policy any time soon.
An environment of low interest rates, a weak dollar and accelerating price pressures is usually positive for gold, which becomes cheaper to non-U.S. investors and can help insulate a portfolio against inflation.
Gold's inverse correlation to the U.S. dollar makes it cheaper for non-U.S. investors and means it draws more strength from weakness in the greenback. Highlighting gold's dependence on the dollar is the tepid performance of the metal versus other major currencies such as the euro, against which it has barely moved this week.
Spot gold was last up 0.1 percent at $1,536.30 an ounce by 11:55 a.m., on course for a 1.8 percent gain this week, when it hit a record $1,538.35. Trading volumes were restricted by a public holiday in London.
SILVER HOLDS FIRM
Meanwhile silver hovered close to its highest in over 31 years, having gained nearly 5 percent this week, although analysts say its robust performance against the other precious metals may not be sustainable.
"The move in gold has been much slower with silver continuing to outperform," said Saxo Bank manager Ole Hansen.
"Against the other major currencies the performance year to date has been pretty flat with euro (priced) gold showing a negative return of 2.5 percent," he added.
Silver was last up 0.9 percent at $48.86 an ounce, profiting also from the softness in the dollar, which fell 0.3 percent against a basket of currencies.
"If the dollar continues to weaken, then it's only likely to boost gold as well as silver as the inverse relationship between the two assets persists. I would say that for gold I am still looking for it to hit $1,600 this year," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
"In the long term, I think, if we see silver prices at such a high level, then it could hurt the industrial demand."
But dealers said strong investment demand for silver would keep the metal at record levels, while a lack of scrap sales in the physical market suggested that investors expected more gains. Year to date, silver was up almost 60 percent, sharply above gold's 8 percent gain.
"There's some selling but I would say it's very light," said a dealer in Singapore, who trades gold and silver. "It had been a very busy week, and I am glad today is Friday. It's all quiet, finally."
The CME Group Inc, parent of the Chicago Board of Trade, said on Thursday it would raise maintenance margins for COMEX 5000 Silver futures by 13.2 percent, making it more expensive for silver speculators to trade in.
Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak, which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue.
In the energy market, crude eased on Friday, after settling at a 31-month high in the previous session, on concerns that slowing growth in top consumer United States may pare demand, but a weaker dollar and unrest in the Middle East helped stem a slide in prices.
Platinum echoed the strength in gold and silver, rising 0.3 percent on the day to $1,841.99 an ounce, while palladium rose 1.8 percent to $784.47. (Additional reporting by Lewa Pardomuan in Singapore; editing by Anthony Barker)
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* BSE Sensex drops for fifth straight session
* Foreign funds net sellers of Indian shares Mon-Wed
* Sentiment cautious ahead of cbank policy next week (Updates to close)
By Ami Shah
MUMBAI, April 29 (Reuters) - Indian shares declined for the third month out of the four in 2011, and ended lower for the fifth straight session on Friday, as investors exercised caution on expectations the central bank may adopt a hawkish approach at its policy on Tuesday.
They also posted their worst weekly loss since late February, after foreign institutional investors (FIIs) sold Indian equities for the first three sessions this week.
Traders expect the market to take cues from the Reserve Bank of India's action next week, but ruled out a sell-off by foreign funds.
Financials were the top losers as the market expected the RBI to raise key short-term rates by at least 25 basis points, which would mark the ninth increase since mid-March last year, to curtail persistently high inflation. For a Take a Look [ID:nL3E7FT0L9]
"The RBI may hike rates by 25 basis points, but a very harsh action is not likely," said Sandeep Sabharwal, CEO of portfolio management services at brokerage Prabhudas Lilladher.
"A bigger move will not be of much help as inflation is largely driven by commodity prices.'
The banking sector index slipped 1.7 percent.
The 30-share BSE index slipped 0.81 percent, or 156.06 points, at 19,135.96 points, with 21 components losing ground.
It declined 2.4 percent for the week, taking losses for the month to 1.6 percent.
The 50-share NSE index dropped 0.6 percent to 5,749.50.
More than two shares declined for every share that advanced in the broader market on a volume of 711 million shares on NSE, higher than their 30-day average daily volume of 645 million shares.
"I don't think there is a directional sell off by FIIs. We are just seeing some correction after the steep run up in March," Sabharwal said. "People are jittery before the RBI policy."
Foreign funds, who had been net sellers in January and February, have bought a total of $3.2 billion over the past eight weeks.
"With Fed's easy policy stance, inflows are likely to be good," he added.
Leading lenders State Bank of India , ICICI Bank and HDFC Bank fell between 0.3 percent and 1.8 percent.
Mortgage lender Housing Development Finance Corp shed 1.5 percent.
Energy giant Reliance Industries rose 1.2 percent after falling 6.6 percent over four previous sessions.
State-run explorer Oil & Natural Gas Corp slipped 2.8 percent, after gaining nearly 5 percent over the previous three sessions.
World equities as measured by the MSCI index edged 0.1 percent higher by 1032 GMT, while its emerging markets index slipped 0.1 percent.
STOCKS THAT MOVED
* Crompton Greaves tumbled 10.1 percent to 252.20 rupees after the power equipment maker reported late on Thursday a 6 percent decline in March-quarter profit. [ID:nBMB012762]
Credit Suisse said in a note a sharp fall in margins was a concern.
* Uco Bank dived 9 percent to 104.45 rupees after the state-run reported a 40.5 percent decline in its quarterly net profit.[ID:nBMB012774]
* Oriental Bank of Commerce declined nearly 6 percent to 345.55 rupees after the state-run lender reported a lower-than-expected 5.4 percent increase in its March quarter net profit.[ID:nBMB012771]
* Steel Authority of India closed 1.6 percent lower at 159.30 rupees, ahead of its March-quarter earnings announcement.
MAIN TOP THREE BY VOLUME ON NSE
* Ambuja Cements on 63.7 million shares
* Unitech on nearly 30 million shares
* Alok Industries on 29.5 million shares
FACTORS TO WATCH * For technical analysis see: www.reuterstechnicals.com * Indian rupee report * Indian bonds report * Dollar stuck near 3-yr lows; month-end flows weigh * Brent falls to $124.70 on fears over slower U.S. growth * Dollar still friendless, stocks pause for breath * U.S. stock index futures slip; earnings, data eyed * For closing rates of Indian ADRs (Reporting by Ami Shah; Editing by Aradhana Aravindan) (If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)
ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea.. S.E. Asia....... Hong Kong... Taiwan... Australia/NZ.... India....... China....
OTHER MARKETS: Wall Street .... Gold ....... Currency. Eurostocks..... Oil ........ JP bonds.. ADR Report ..... LME metals. US bonds.. Stocks News US.. Stocks News Europe
DIARIES & DATA: Indian Data Watch [ID:nINDATA] Asia earnings diary U.S. earnings diary European diary Indian diary Wall Street Week Ahead Eurostocks Week Ahead
TOP NEWS: For top Asian company news, double click on: U.S. company news European company news Forex news Global Economy news Technology news Telecoms news Media news Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: topnews.session.rservices.com
LIVE PRICES & DATA: World Stocks <0#.INDEX> Currency rates Dow Jones/NASDAQ Nikkei FTSE 100 Debt <0#USBMK=> Indian rupee LME price overview
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Apr
The illuminated euro sign is seen in front of the headquarters of the European Central Bank (ECB) in Frankfurt April 5, 2011.
Credit: Reuters/Kai Pfaffenbach
BRUSSELS |
BRUSSELS (Reuters) - Euro zone inflation rose further above the European Central Bank's target in April, increasing the chances of an interest rate rise in June, despite a weakening of economic sentiment and household demand.
Inflation in the 17 countries using the euro rose to 2.8 percent year-on-year this month from 2.7 percent a month earlier, the highest level since October 2010, when it was 3.2 percent.
Consensus expectations had been for a flat reading compared to March ahead of next Thursday's European Central Bank meeting on interest rates.
"I can imagine that some market participants will expect the rate increase by the European Central Bank at an earlier date. We expected June, the market is still expecting July. I guess the consensus will now move to June," said Piet Lammens, economist at KBC.
The ECB raised its main interest rate from record lows of 1.0 percent to 1.25 percent in April, concerned about the impact on consumer prices of rising costs of energy and food.
Other data this month has suggested growth in both Germany and the euro zone is peaking and figures from Spain, the biggest of the economies under threat in Europe's debt crisis, showed unemployment soaring and retail sales sinking.
A monthly European Commission survey showed economic sentiment in the euro zone as a whole fell for the second month in a row to 106.2 in April, down from 107.3 in March and below market expectations of a decline to 107.0.
"Survey data from the European Commission clearly indicates that the combination of high oil prices, a strong euro, and fiscal and monetary tightening has started to dent the economic mood in the euro zone," said Martin van Vliet, economist at ING.
The decline in sentiment was in all sectors of the economy except construction, with consumer optimism falling the most to -11.6 from -10.6 in March.
NO LOAN BOOST
ECB data also showed that the annual growth rate of loans to the private sector in the single currency area slowed in March, bucking expectations for a rise, but M3 money supply growth accelerated.
"Monetary data continue to point to a modest recovery in euro area money and loan growth," said Christoph Balz, economist at Commerzbank.
"While the data in itself do not indicate upside risks to price stability that require further monetary tightening, they are further proof that the economic situation has changed substantially since 2009 -- which is why the ECB thinks that extremely low interest rates are no longer appropriate.
More evidence of weakening household demand could be seen in retail sales data.
Sales in Germany fell in March, defying expectations of a rise as consumers bought fewer groceries and textiles during a month when inflation surpassed the 2 percent threshold.
Adjusted for consumer price rises, sales declined by 2.1 percent month-on-month, and by 3.5 percent year-on-year.
The drop in consumer demand was more pronounced in the "peripheral" euro zone countries seeking to win back market confidence in their public finances with tough austerity measures.
In Spain sales fell 8.6 percent year-on-year in March and in Greece the decline was 10.6 percent in February.
Euro zone consumer inflation expectations, which have been rising quickly since November 2010, edged marginally lower to 30.7 from 30.8. Selling price expectations among manufacturers, on the rise since August 2010, fell more markedly to 21.5 from 24.4.
The European Commission's business climate indicator, which points to the phase of the business cycle, also fell for the second month in a row, to 1.28 points from 1.43 in March.
"Despite this, the current level of the indicator remains close to historic peaks, suggesting that the recovery in industry will continue in the coming months," the Commission said.
Eurostat data also showed that unemployment in the euro zone held stable at 9.9 percent of the workforce in March.
(Additional reporting by Madrid, Berlin, Frankfurt and Athens bureaux; editing by Rex Merrifield and Patrick Graham)
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Apr
JAKARTA, April 29 |
JAKARTA, April 29 (Reuters) - Bank Mandiri , Indonesia's biggest lender, said on Friday its first-quarter net profit rose 89 percent, driven mostly by a one-time gain from the stake sale in Garuda Indonesia's public offering earlier this year.
The firm's first-quarter net profit was 3.8 trillion Indonesian rupiah, compared with 2 trillion rupiah in the same period a year earlier, said Pahala Mansury, Mandiri's director for finance and strategy.
It reported a first-quarter net interest income of 5.8 trillion rupiah. That compared with net interest income of 4.63 trillion rupiah in the year-ago period.
The one-time gain was estimated at about 1.3 trillion rupiah when it sold its stake in flag carrier Garuda in February.
Analysts forecast Mandiri's 2011 net profit to rise 28 percent to 11.79 trillion rupiah, according to Thomson Reuters data.
Shares in Mandiri rose 1.4 percent ahead of the results, and have gained more than 6 percent in the first quarter to outperform a Jakarta index that was down around 0.7 percent in the same period. (Reporting by Fathiya Dahrul; Editing by Muralikumar Anantharaman)
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Apr
BUDAPEST, April 29 |
BUDAPEST, April 29 (Reuters) - Hungary's OTP Bank OTPB.BU shareholders on Friday approved a dividend of 72 forints per share after its 2010 results.
OTP will distribute the dividend attached to its treasury shares among its outside investors, who can expect to receive about 73 forints per share.
The dividend will be disbursed from June 14, 2011, OTP said. (Reporting by Marton Dunai)
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Apr
FRANKFURT, April 29 |
FRANKFURT, April 29 (Reuters) - Key euro-priced bank-to-bank lending rates hit their highest levels in two years on Friday as a fresh jump in euro zone inflation boosted expectations of further ECB rate hikes in the months ahead.
New euro zone figures showed inflation in the 17-country bloc hit 2.8 percent in April, its fastest annual rate in more than 2-1/2 years and supporting expectations the ECB will raise rates again as soon as June.
The three-month Euribor rate EURIBOR3MD= -- traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending -- rose to 1.385 percent on Friday, the highest since late April 2009 and up from 1.375 percent the previous day.
Six-month rates EURIBOR6MD= rose to 1.675 percent from 1.669 percent, shorter-term one-week rates EURIBORSWD= increased to 1.226 percent from 1.222 percent while longer-term 12-month rates EURIBOR1YD= rose to 2.132 percent.
EONIA overnight interest rates EONIA= fell to 1.282 percent on Thursday.
Excess liquidity currently stands at 25 billion euros after banks upped their intake of ECB funding this week, according to Reuters calculations.
The central bank raised euro zone rates by a quarter of a percentage point to 1.25 percent earlier this month, ending almost two years of record-low interest rates. [ID:nLDE7351QH]
Two-thirds of the 62 economists polled by Reuters after the rate hike, which until last month would have shocked experts, expect another rate rise by July at the latest. [ECB/INT]
Besides ECB policy rates, attention is intensifying on what the central bank will do with its unlimited liquidity policy in the coming months.
In March it left all its operations at full allotment until July, putting its exit strategy on hold for the second quarter running. But recent comments from Ewald Nowotny and Axel Weber have increased expectations that the bank will soon restart the phasing out process.
It is already back to its pre-crisis range of funding operations. Three-month loans are again the longest maturity on offer and banks have now paid back all the six-month and 12-month loans the ECB injected during the turmoil. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphic of EONIA trading volumes click here
For graphic of euro zone liquidity levels click r.reuters.com/wer86p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT.
* For a table of the latest Euribor fixings for terms of one week to one year, double click on EURIBOR=
* For a table of the previous day's fixings of EONIA swap rates, which show market expectations for future overnight lending rates, double click on EONIAINDEX
* For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select 'Related Graph' 1 week EURIBORSWD= EONIAINDEXSW= 2 week EURIBOR2WD= EONIAINDEX2W= 3 week EURIBOR3WD= EONIAINDEX3W= 1 month EURIBOR1MD= EONIAINDEX1M= 2 month EURIBOR2MD= EONIAINDEX2M= 3 month EURIBOR3MD= EONIAINDEX3M= 4 month EURIBOR4MD= EONIAINDEX4M= 5 month EURIBOR5MD= EONIAINDEX5M= 6 month EURIBOR6MD= EONIAINDEX6M= 7 month EURIBOR7MD= EONIAINDEX7M= 8 month EURIBORS8M= EONIAINDEX8M= 9 month EURIBOR9MD= EONIAINDEX9M= 10 month EURIBOR10MD= EONIAINDEX10M= 11 month EURIBOR11MD= EONIAINDEX11M= 1 year EURIBOR1YD= EONIAINDEX1Y= (Reporting by Frankfurt newsroom; Editing by Ruth Pitchford)
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