Monday, December 17, 2012

Cut or no cut, market expected to move upward


Reserve Bank of India will announce its mid quarter policy review tomorrow. The expectation of rate cut has increased, due to lower than expected November inflation data. The market is not expecting a repo rate cut tomorrow but expecting a cut only in January that too 25-50 bps cut in the repo rate.

Malaysian rubber prices are expected to see an upward trend on good demand for natural rubber, especially from China. China's economy is showing fresh signs of strength with improvement in manufacturing activity for December, which could help boost market sentiment. China is the world's largest consumer of rubber and its key suppliers are Thailand, Indonesia and Malaysia.

RSS4 grade rubber in India closed at `.163 a kg and the price of RSS3 grade closed with a positive note at `.170.12 per kg at Bangkok. In the domestic futures market, the January 2013 series currently trading at `.166.30, February at `.168.50 and March at `.171.50 a kg on the National Multi Commodity Exchange. On the Tokyo Commodity Exchange, December futures series closed upward at ¥267.2 per kg, January 2013 at ¥268.8 and May 2013 at ¥284.9 per kg. One can expect more action in tommorrow's market.

Read lot more in Rubber4U – 1st January 2013 issue

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