Gold Falls to Lowest This Month as Asian Holiday May Curb Demand

Gold declined to the lowest price this month in London on speculation that physical demand will slow during this week’s Lunar New Year in Asia.
China, 2011’s second-biggest gold buyer, after India, and most Asian markets are closed for this week’s holiday. Gold is down 0.8 percent this year after rallying for a 12th straight year in 2012 as nations from the U.S. to China pledged more steps to boost economic growth. Haruhiko Kuroda, one of the potential candidates to head the Bank of Japan, said today in an interview in Tokyo that additional monetary easing can be justified this year.
“The absence of the Chinese market this week means demand from other regions has a larger gap to plug, thus exposing prices to a fragile floor,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. Still, “the broader macro environment remains supportive for prices given low interest rates and global balance sheet expansion.”
Gold for immediate delivery fell 0.4 percent to $1,661.11 an ounce by 11:08 a.m. in London. Prices reached $1,659.75, the lowest since Jan. 31. Futures for April delivery were 0.2 percent lower at $1,663.90 on the Comex in New York.
Bullion at the morning “fixing,” used by some mining companies to sell output, was at $1,663.50 in London, down from $1,668.25 in the afternoon of Feb. 8. The London-based World Gold Council is due to release a quarterly report this week that will show nations’ annual bullion demand.

European Ministers
Ministers from the 17-member euro area meet today to discuss aid to Cyprus and Greece as a tightening election contest in Italy and corruption allegations in Spain threaten to reignite the region’s debt crisis. Group of 20 finance chiefs and central bankers will gather in Moscow on Feb. 15.
“Given Asia is shut down for the New Year holiday, it allows markets internationally to focus on what’s happening in the EU,” said Gavin Wendt, a senior resource analyst and founder of Mine Life Pty in Sydney. The meeting of finance ministers will be “closely watched,” he said by phone today.
Silver for immediate delivery slipped 0.3 percent to $31.335 an ounce. Palladium fell 0.5 percent to $750.73 an ounce. Trading volume in New York was 61 percent lower than the average in the past 100 days for this time of day, according to figures compiled by Bloomberg. Platinum was down 0.2 percent at $1,712.40 an ounce.
Holdings in exchange-traded products backed by platinum reached a record 51.77 metric tons on Feb. 8, data compiled by Bloomberg show. Assets and prices have gained this year on concern that output may drop in top producer South Africa.

ONGC Posts Lowest Profit in Six Quarters on Crude Oil Discount

Oil & Natural Gas Corp., India’s biggest energy explorer, posted its lowest quarterly profit in more than a year after giving discounts on crude oil to state- run refiners to compensate them for below-cost fuel sales.
Net income fell 18 percent to 55.6 billion rupees ($1.03 billion) in the three months ended Dec. 31 from 67.4 billion rupees a year earlier, the New Delhi-based explorer said in a stock exchange filing today. That beat the 53.8 billion rupee median estimate of 35 analysts surveyed by Bloomberg. Sales rose 16 percent to 209.9 billion rupees.
Finance Minister Palaniappan Chidambaram’s attempt to narrow the budget deficit by raising diesel prices and giving refiners including Indian Oil Corp. the freedom to set future prices on their own will probably reduce the subsidy ONGC gives on crude oil sales, helping boost earnings. Under a government diktat, the explorer must sell oil at a discount to state refiners, which in turn sell fuels below cost to curb inflation.
ONGC has gained 15 percent this year compared with a 0.2 percent increase in the benchmark Sensitive Index. The shares fell 1.7 percent to 308.40 rupees at the close of trading in Mumbai today, before the earnings were announced.
The price of Brent crude, a benchmark for more than half of the world’s oil, rose 1 percent on an average in the quarter, compared with a year earlier. Brent for March settlement was at $118.31 a barrel, down 59 cents, on the ICE Futures Europe exchange at 11:05 a.m. London time.
Higher Expenses
The explorer’s total expenses increased to 141.60 billion rupees from 120 billion rupees a year earlier, according to the statement. Raw material costs were 1.56 billion rupees, compared with 1.52 billion rupees a year earlier.
While net realization from selling a barrel of oil increased to $47.97 from $44.71, gross realization fell to $110.16 a barrel from $111.48. A one-time income of 31.4 billion rupees had boosted profit in the year-earlier quarter.
The lower profit may hurt ONGC’s plans to raise production and add reserves in India and overseas as it plans to spend 11 trillion rupees by 2030. It plans to expand exploration in India offshore areas and buy shale gas and oil sands properties overseas, Finance Director A.K. Banerjee said Oct. 2.

The explorer is seeking to reverse dropping oil production at unit Imperial Energy Corp.’s fields in Russia’s west Siberian region as it invites bids from surveyors to assess the potential reserves trapped in shale rocks in the Bazhenov formation. Bazhenov may hold as much as 360 billion barrels of recoverable reserves, Bloomberg Industries said in a Dec. 19 report, citing estimates by Russian subsoil agency Rosnedra. Venezuela holds 296.5 billion barrels, the world’s biggest known oil reserves.
The government is also studying a report by a panel led by Chakravarthy Rangarajan, chief of the prime minister’s Economic Advisory Council, that recommends linking natural gas prices in India to global benchmarks. If accepted, rates may almost double to about $8 per million British thermal units, benefitting producers such as ONGC and Reliance Industries Ltd.

Coal Miner’s $1.4 Billion Rail to End Imports: Corporate India

Coal India Ltd., set to build a $1.4 billion railway link through its three richest mining regions, said the untapped pits will help the world’s second-biggest thermal coal importing nation end overseas purchases.
The 203-mile (327-kilometer) network, to be funded by the company and built by Indian Railways in five years, will free up 300 million metric tons of coal annually in the states of Odisha, Jharkhand and Chhattisgarh, Coal India Chairman S. Narsing Rao said in an interview. Indian power companies pay about 40 percent more than local prices to import 70 million tons of coal, about 20 percent of their annual consumption.
The railway line can eliminate the need for imports of thermal coal in five years,” Rao said in an interview from his office in Kolkata. “Given the reserves we have, we should not have to depend on other countries for electricity generation.”
The state-owned company, which is the world’s biggest producer of the fuel, needs to step up output to comply with Prime Minister Manmohan Singh’s 2012 directive to ensure adequate supply and prevent blackouts in an economy expanding at the slowest pace in a decade. Failure to guarantee supplies to utilities will result in a penalty for the firm whose production growth has stalled in the past three years.
Stalled Projects
Coal India shares have advanced 2 percent in the past year, compared with a 9.7 percent gain in the benchmark Sensitive Index, according to data compiled by Bloomberg. The stock fell 0.1 percent to 338.45 rupees, the lowest closing price in almost eight months.
Power projects worth at least $35 billion announced by billionaires including Anil Ambani and Gautam Adani, have stalled because of fuel shortages. A peak shortfall of 9 percent in electricity supplies leads to outages that shave about 1.2 percentage points off India’s annual economic growth, according to government estimates.
The company’s proposal for the railway link has been delayed for more than six years, pending approval from the railway and environment ministries. The government last year formed an inter-ministerial panel to push the project following Singh’s order.
“The heavy penalty Coal India has to pay if it fails to supply its customers is driving it to do everything it can to boost production,” said Deven Choksey, managing director at K.R. Choksey Shares & Securities Pvt. in Mumbai.
Volumes, Prices
Coal India, which must pay as much as 40 percent of the value of any supply shortfall as penalty, reported a 19 percent increase in profit to 30.8 billion rupees ($575 million) for the second quarter ended Sept. 30. A rising wage bill suppressed revenue gains and led to earnings missing analyst estimates.
Coal India, which accounts for more than 80 percent of the nation’s output, last raised prices two years ago. It had cash worth more than $12 billion as of Sept. 30.
“The company’s sales volumes are not increasing the way they should and there’s no visibility on prices,” said Rahul Jain, an analyst at CIMB Securities India Pvt. in Mumbai, who has an equivalent of a sell rating for the stock. “For commodity stocks, you need to have good volumes and prices. Both are missing here.”
Of the 52 analysts that cover the company, 35 recommend purchasing the stock, while five advise selling it, according to data compiled by Bloomberg.

Social Unrest
India’s annual thermal coal demand is expected to climb 43 percent to 730 million tons by 2017, while supplies from local mines may increase 38 percent to 565 million tons, the Planning Commission’s energy adviser I.A. Khan said in an interview. Cheaper local coal will lower the cost at existing plants, while ensuring energy security to upcoming projects.
Coal India has said it will start importing to meet its supply contracts. While the company’s output is forecast to rise 6.4 percent this year to a record 464 million tons, it will still fail to meet demand.
“Law and order issues have been the biggest impediment to output,” Coal Minister Sriprakash Jaiswal said last month.
Some mines in the eastern states of Odisha and Jharkhand on an average remain shut for three days in a month because of social unrest, Coal India Personnel Director R. Mohan Das said in an interview, without elaborating on the loss. Delays in environment approvals and difficulties in acquiring land have also affected production, he said.
India, which generates 57 percent of its electricity from coal, plans to add 118 gigawatts of generation capacity in the five years ending March 2017, Khan said. Power companies added about 55,000 megawatts in the five years ended March 31, the most in a five-year period. The country has installed generation capacity of 211 gigawatts.
“India is doing everything to increase coal production,” said Debasish Mishra, a partner at Deloitte Touche Tohmatsu India Pvt. in Mumbai. “The railway plan needs to be supplemented with speedy approvals and efficient project management.”

China Eclipses U.S. as Biggest Trading Nation

China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports of goods, official figures from both countries show.
U.S. exports and imports of goods last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s trade in goods in 2012 amounted to $3.87 trillion.
China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries. Germany may export twice as much to China by the end of the decade as it does to France, estimated Goldman Sachs Group Inc.’s Jim O’Neill.
“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said in a telephone interview. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”
U.S. Leadership
When taking into account services, U.S. total trade amounted to $4.93 trillion in 2012, according to the U.S. Bureau of Economic Analysis. The U.S. recorded a surplus in services of $195.3 billion last year and a goods deficit of more than $700 billion, according to BEA figures released Feb. 8. China’s 2012 trade surplus, measured in goods, totaled $231.1 billion.
The U.S. economy is also double the size of China’s, according to the World Bank. In 2011, the U.S. gross domestic product reached $15 trillion while China’s totaled $7.3 trillion. China’s National Bureau of Statistics reported Jan. 18 that the country’s nominal gross domestic product in 2012 totaled 51.93 trillion yuan ($8.3 trillion).
“It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. The increase isn’t all the result of an undervalued yuan fueling an export boom, as Chinese imports have grown more rapidly than exports since 2007, he said.
Biggest Exporter
The U.S. emerged as the preeminent trading power following World War II as it spearheaded the creation of the global trade and financial architecture. Protectionist policies in the 1930s had exacerbated the global economic depression. At the same time the U.K., the leading trading nation of the 19th century, began to dismantle its colonial empire.
China began focusing on trade and foreign investment to boost its economy after decades of isolation under Chairman Mao Zedong, who died in 1976. Economic growth averaged 9.9 percent a year from 1978 through 2012.
China became the world’s biggest exporter in 2009, while the U.S. remains the biggest importer, taking in $2.28 trillion in goods last year compared with China’s $1.82 trillion of imports. HSBC Holdings Plc forecast last year that China would overtake the U.S. as the top trading nation by 2016.
China was last considered the leading economy during the height of the Qing dynasty. The difference is that in the 18th century, the Qing Empire -- unlike rising Britain -- didn’t focus on trade. The Emperor Qianlong told King George III in a 1793 letter that “we possess all things. I set no value on objects strange or ingenious, and I have no use for your country’s manufactures.”
Finished Products
While China is the biggest energy user, has the world’s biggest new car market and the largest foreign currency reserves, a significant portion of China’s trade involves importing raw materials and parts to be assembled into finished products and re-exported, an activity that provides “only modest value added,” Eswar Prasad, a former International Monetary Fund official who is now a professor at Cornell University in Ithaca, New York, said in an e-mail.
Last month China’s trade expanded more than estimated, with exports rising 25 percent from a year earlier and imports increasing 28.8 percent, government data released Feb. 8 showed. China’s trade figures in January and February are distorted by the week-long Lunar New Year holiday that fell in January of last year and started Feb. 9 this year.
Data Questioned
Economists from banks including UBS AG and Australia & New Zealand Banking Group Ltd. recently expressed skepticism about China’s export data after the customs administration reported an unexpected 14.1 percent export gain in December. The General Administration of Customs defended the data last month, saying all statistics are based on actual customs declarations, and the Ministry of Commerce said the jump was caused by exporters who hurried shipments before a waiver of inspection fees expired at the end of the month.
The U.S.’s bilateral trade deficit with China, which peaked in 2012, could remain a flashpoint of tension between the two countries, Prasad said.
“This trade imbalance is not representative of the amount of goods actually produced in China and exported to the U.S., but this perspective tends to get lost amidst the heated political rhetoric in the U.S,” said Prasad.
According to O’Neill, the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.
“One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,” O’Neill said, mentioning China’s inclusion in the IMF’s Special Drawing Rights currency basket. “To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.”

Soybeans Lead Drop in Agricultural Commodities After USDA Report

Soybeans fell in Chicago, extending the biggest drop in almost three months and leading farm commodities lower after the U.S. government raised its outlook for world inventories of the oilseed.
Global soybean stockpiles will be 60.1 million metric tons before this year’s Northern Hemisphere harvest, more than the 59.5 million estimated last month on higher output in Brazil, the U.S. Department of Agriculture said Feb. 8. Analysts had expected inventories to fall to 59.1 million tons, a Bloomberg survey showed.
“People expected a bigger drop in Argentina, so that disappointed, and the USDA forecast higher-than-expected production in Brazil,” Antoine Liagre, an oilseeds analyst at Bourges, France-based farm adviser Offre et Demande Agricole, said by phone. “The result was an unexpected outlook for higher world stocks.”
Soybeans for delivery in March slid 1.4 percent to $14.315 a bushel on the Chicago Board of Trade by 12:53 p.m. Paris time. Prices reached $14.2925, the lowest level since Jan. 25, after retreating 2.3 percent by the close on Feb. 8, the largest decline since Nov. 12. The oilseed headed for a fourth retreat today, which would match a streak ended Jan. 11.
The harvest in Brazil, the biggest grower, will climb to a record 83.5 million tons, against last month’s forecast of 82.5 million, the USDA said. Farmers in Argentina will reap 53 million tons this marketing year, below 54 million estimated in January, the USDA said. Its outlook exceeded the average estimate of analysts surveyed by Bloomberg of 82.7 million tons for Brazil and 52.9 million tons for Argentina.
Chinese Imports
There may also be concern about cancellations of Chinese purchases of U.S. soybeans later in the season, said Kieran Walsh, a commodities broker at Aurel BCG in Paris. The Asian nation is the world’s biggest importer of the oilseed.
Harvests in South America will help satisfy “rampant” global soybean demand, according to Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Soybeans are 2.03 times more expensive than corn, the least in a week, compared with a 10-year average of 2.4 times. The crops compete for acreage.
Corn for delivery in March slipped 0.4 percent to $7.0625 a bushel, on course for a seventh drop in a row, and wheat for delivery the same month fell 0.6 percent to $7.52 a bushel. Milling wheat for delivery in May traded on NYSE Liffe in Paris declined 0.2 percent to 241 euros ($322) a ton.

Hedge Funds’ Fourth Bullish Week Boosts Copper Bet

edge funds increased bullish commodity bets for the fourth straight week and became the most bullish on copper since December on signs of faster growth in the U.S. and China.
Speculators boosted net-long positions across 18 U.S. futures and options in the week ended Feb. 5 by 11 percent to 885,655 contracts, marking the longest stretch of gains in more than six months, U.S. Commodity Futures Trading Commission data show. Traders lifted bullish wagers on everything from copper to platinum, corn and soybeans.

 gauge of prices for 18 commodities most tied to economic growth, including burlap and steel, reached the highest since September 2011 at the end of January as global manufacturing gained. In China, the world’s top consumer of cotton, copper and pork, trade grew more than analysts forecast, the government said Feb. 8. Service industries in the U.S., the biggest user of crude oil and corn, expanded more than analysts predicted in January, a private survey showed Feb. 5.
“With China and the U.S. registering growth, the economically sensitive commodities will do well,” said Michael Strauss, who helps oversee about $26 billion as chief investment strategist at Commonfund in Wilton, Connecticut. “The global environment is favorable for commodities.”
Markets Rally
The Standard & Poor’s GSCI gaugeof 24 raw materials traded within 0.1 percent of a four-month high on Feb. 8, before ending the week little changed. The commodity gauge is up 4.4 percent in 2013. The MSCI All-Country World Index of equities climbed 4.6 percent, while the dollar rose 0.6 percent against a basket of six trading partners. Treasuries fell 0.8 percent, a Bank of America Corp. index shows. The GSCI was little changed today.
Exports from China advanced 25 percent in January from a year earlier and imports rose 29 percent, according to government data. Passenger-vehicle sales surged 49 percent to a monthly record, a state-backed group said Feb. 7. The average automobile contains about 50 pounds of copper and 4 grams (0.13 troy ounce) of palladium, platinum or rhodium, according to the International Copper Study Group and Johnson Matthey Plc.
The U.S. non-manufacturing index for January was at 55.2, compared with analyst estimates for a reading of 55, the Institute for Supply Management said. Readings above 50 signal expansion. The group’s employment gauge was the strongest in seven years.
Red Oak
The JoC-ECRI Industrial Price Index, which tracks 18 industrial commodities from plywood to cattle hides, is up 10 percent from a three-month low in November. The measure, begun in 1985 by Geoffrey Moore, founder of the Economic Cycle Research Institute and a mentor to former Federal Reserve Chairman Alan Greenspan, can be used as a leading indicator for global production. Nine components, including ethylene and red oak, aren’t traded on U.S. exchanges and are less influenced by investor sentiment.
The debt crisis in Europe will be a drag on world economies and limit commodities demand, said Stanley Crouch, who helps oversee $2 billion of assets as chief investment officer at New York-based Aegis Capital Corp.
European Central Bank President Mario Draghi said Feb. 7 that the risks to the region’s economy remain to the downside. The continent uses about 18 percent of the world’s copper, Barclays estimates, and accounts for 22 percent of oil consumption, according to data from BP Plc.
Europe Risks
“The problems in Europe have not been fixed,” Crouch said. “Since China is heavily dependent on exports, the slowdown in Europe will continue to weigh on China. I would say there will be a systemic retracing of the risk-asset complex and commodities will come lower.”
Money managers added a net $307 million to commodity funds in the week ended Feb. 9, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Outflows from gold and precious-metals funds totaled $63 million, he said.
Bets on gains in palladium rose 1.3 percent to 22,824 contracts, the highest since the CFTC data begins in 2009. On Feb. 6, prices in New York reached the highest since Sept. 6, 2011. Bullish platinum wagers grew 3.9 percent to 42,530 contracts. Aquarius Platinum Ltd., the world’s fourth-largest producer, said on Feb. 8 that it expects a global supply deficit this year.
Copper Wagers
Copper net-long positions jumped 57 percent to 22,650 contracts, the highest since Dec. 18. Global demand for the metal will climb by 4.7 percent in 2013, driven primarily by a rise in Chinese consumption, Australia & New Zealand Banking Group Ltd. analysts led by Mark Pervan said in a report Feb. 8.
A measure of net-longs for 11 U.S. farm goods jumped 15 percent to 459,806 contracts, the biggest increase since July, the CFTC data show.
Traders boosted their bullish corn position by 11 percent to 182,967 contracts, the highest since Dec. 11. Bets on cocoa gains jumped 19 percent to 18,294 contracts, the biggest increase since November.
Bullish soybean wagers surged 29 percent to 135,644 contracts, the biggest advance since March. Dry weather and shipping delays in South America are boosting demand for supplies of the oilseed from the U.S., the top grower and shipper. Exports are up 27 percent from a year earlier, driven by demand from China, the biggest buyer, U.S. Department of Agriculture data show.
“This will be a better year as the larger economies like China and the U.S. are showing signs of improvement,” said John Kinsey, who helps manage about C$1 billion ($1 billion) at Caldwell Investment Management Ltd. in Toronto. “The interest in commodities is increasing, and we expect higher prices.”

U.S. Stock Futures Little Changed After S&P 500 Rally

U.S. stock futures were little changed, after the Standard & Poor’s 500 Index climbed to a five-year high, as euro-area finance ministers prepared to meet to discuss aid to Cyprus and Greece.
Nike Inc. and AOL Inc. gained more than 2 percent after analysts recommended investors buy the shares. Google Inc. declined 0.7 percent as Chairman Eric Schmidt adopted a plan to sell as many as 3.2 million shares in the operator of the world’s most popular search engine.
Futures on the S&P 500 expiring in March added 0.1 percent to 1,513.4 at 8:39 p.m. in New York. The equity benchmark last week reached its highest level since November 2007, completing its longest streak of weekly gains since August. Dow Jones Industrial Average futures advanced 12 points, or 0.1 percent, to 13,938 today.
The Dow “has flirted with 14,000 for the last week and now that the reporting season is winding down, traders will be looking forward to President Obama’s State of the Union address,” David Madden, market analyst at IG in London, wrote in emailed comments.
The S&P 500 has rallied 6.4 percent so far in 2013 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. The gauge is about 3 percent below its record high reached in October 2007. It has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond-buying to lower interest rates and boost economic growth.
Euro-Area Crisis
Ministers from the 17-member euro area meet today in Brussels to discuss aid to Cyprus and Greece as concern over the region’s sovereign-debt crisis revives. Group of 20 finance chiefs and central bankers will gather in Moscow on Friday.
In the U.S., President Barack Obama will present his legislative priorities for the year in his annual State of the Union address to a joint session of Congress on Tuesday night. The speech is his first State of the Union after being elected to a second term and he is likely to focus on gun control, immigration law and avoiding automatic spending cuts.
Senate Democrats are close to proposing a $120 billion plan for a 10-month delay in the cuts set to begin March 1, according to a Senate Democratic aide. The aide, who asked not to be identified in discussing the proposal, said half of the cost of delaying the across-the-board cuts would be covered by revenue increases and the other half by spending reductions.
Nike, AOL
Nike advanced 2 percent to $55.69. JPMorgan raised its recommendation on the stock to overweight, a rating similar to buy, from neutral. It cited confidence in the sportswear-maker’s ability to focus on profitability and return to double-digit earnings-per-share growth in 2014.
AOL gained 2.3 percent to $34.51 after RBC Capital Markets LLC upgraded its rating on the shares to outperform, the equivalent of buy, from sector perform. The Web publisher that owns the Huffington Post and TechCrunch has rallied 10 percent in February.
Google retreated $5.45 to $779.92. Schmidt’s planned share sales, worth about $2.5 billion, represent 42 percent of his stake in the company. The sales may take place over a maximum period of a year, California-based Google said.

Europe Stocks Fall as Novo Nordisk Plunges on Drug Delay

European stocks declined as Novo Nordisk A/S sank the most in almost four years after failing to win American approval for a new drug. U.S. index futures rose, while most Asian markets were closed for the Lunar New Year.
Novo Nordisk, the world’s largest insulin maker, tumbled 12 percent. Lundin Petroleum AB lost 9.1 percent after the company said resources at its Johan Sverdrup oil discovery in the North Sea may be toward the low end of forecasts. Royal Ahold NV rallied 4.3 percent after agreeing to sell its 60 percent stake in ICA, Sweden’s largest food retailer, for $3.1 billion.

The Stoxx Europe 600 Index fell 0.4 percent to 286.31 at 11:56 a.m. in London. The gauge has still advanced 2.4 percent this year after U.S. lawmakers agreed on a budget avoiding tax increases and spending cuts that had threatened to push the world’s largest economy into a recession. The Euro Stoxx 50 Index of euro-area shares, which excludes Denmark’s Novo Nordisk, advanced 0.2 percent today.
Stocks “were off to the races at the beginning of the year and it was too much to be sustainable,” Frances Hudson, who helps manage about $248 billion as a strategist at Standard Life Investments in London, said in a Bloomberg Television interview with Francine Lacqua. “Having a nice pause to consolidate is a good thing and allows people to take a more measured approach.”
2007 High
Standard & Poor’s 500 Index futures gained 0.2 percent today after the benchmark gauge for U.S. equities closed at the highest level since November 2007 last week. The volume of shares changing hands in Stoxx 600 companies was 33 percent lower than the 30-day average, as markets in Japan, China, Hong Kong, South Korea, Taiwan, Vietnam, Singapore and Malaysia were closed, according to data compiled by Bloomberg.
Ministers from the 17-member euro area meet today to discuss aid to Cyprus and Greece as a tightening election contest in Italy and a political scandal in Spain threaten to reignite the region’s debt crisis. Group of 20 finance chiefs and central bankers will gather in Moscow on Friday.
European companies from Barclays Plc to Total SA and Heineken NV are due to report earnings this week, Bloomberg data show. Stoxx 600 members are forecast to increase dividends by 1.8 percent in 2013, according to analysts’ estimates compiled by Bloomberg.
Companies around the world are rewarding shareholders with the highest dividends in more than two decades compared with bond interest payments. Companies in the MSCI World Index paid out an average 2.7 percent of their share price as of last week, according to data compiled by Bloomberg. That compares with the 2.6 percent yield on the Bank of America Merrill Lynch Global Corporate Index of investment-grade bonds and 6.1 percent for securities in the Barclays Global High-Yield Index.
Novo Nordisk
Novo Nordisk, which accounts for 0.9 percent of the Stoxx 600 by weighting, tumbled 130 kroner to 940 kroner, the biggest drop since April 2009. The U.S. Food and Drug Administration said its Tresiba diabetes medication can’t be approved without additional data on heart safety and the Danish drugmaker won’t be able to provide the information this year, according to a statement from Novo Nordisk.
Sanofi, which competes with Novo Nordisk to dominate the diabetes market with its Lantus insulin, climbed 4.4 percent to 72.10 euros in Paris, the biggest jump since October 2011.
Lundin Petroleum fell 15 kronor to 149.90 kronor in Stockholm after saying resources in its part of the Johan Sverdrup discovery will probably be within the lower half of the forecast for 800 million to 1.8 billion barrels of oil equivalent. Det Norske Oljeselskap ASA, which owns parts of the discovery, declined 4.3 percent to 82.25 kroner.
Fugro Falls
Fugro NV dropped 6.7 percent to 39.27 euros in Amsterdam. Supervisory board Vice Chairman Frans Cremers quit the biggest deepwater-oilfield surveyor because of “the pace with which changes within the financial organisation of Fugro are implemented and that decisions of the supervisory board in respect thereof are not adequately carried through,” it said.
Ahold climbed 45 cents to 11.05 euros after the retailer agreed to sell a stake in ICA to Hakon Invest AB for 20 billion kronor ($3.1 billion). Ahold will also pay a 1.2 billion-kronor dividend payment from ICA to Hakon.
Bilfinger SE gained 2.7 percent to 75.95 euros after Germany’s second-largest construction company forecast an increase in profit in 2013, driven by savings and demands for engineering work and services in the power industry. The company reported a 2 percent gain in sales last year to 8.64 billion euros ($12 billion).

U.S. says Egypt needs to move fast to fix economy

The United States has urged Egypt to move fast to agree a loan deal with the IMF, reform its energy sector and guarantee investors against "arbitrary acts" to avert a deeper slide in its economy.

In unusually blunt comments, U.S. Ambassador Ann Patterson said Egypt's government and opposition must stop ignoring economic problems and work together to fix them.

"The most catastrophic path is for the government and the political leadership of the country - whether in power or in opposition - to avoid decisions, to show no leadership, to ignore the economic situation of the country," she said in a speech delivered in Alexandria on Sunday, according to a text posted on the embassy's website.

"The talks with the International Monetary Fund need to be brought to closure."

Egypt has been negotiating for months on a $4.8 billion IMF loan but talks have been repeatedly delayed due to the Muslim Brotherhood-led government's reluctance to cut goods and fuel subsidies on which poor Egyptians rely, an IMF source said.

Prime Minister Hisham Qandil met IMF chief Christine Lagarde in Davos, Switzerland, last month and said an IMF mission would return to Cairo within two weeks to conclude an agreement, but there has been no sign of a resumption of talks and the government has yet to issue an updated fiscal plan.

Patterson highlighted Egypt's dwindling foreign reserves and a growing reliance on imported food and energy as warning signs, noting that these were key determinants of social stability.

"Egypt's numbers paint a bleak picture," she said. "Currency reserves are at a critical level, roughly $14 billion or three months' worth of imports."

The reserves are kept afloat only due to regular injections of cash by Qatar and Turkey, she said, noting that a black market for dollars was growing and the exchange rate "needs to respect fundamental laws of economics".

The falling value of the pound, which has lost about 8 percent against the dollar since December 31, pushed annual consumer price inflation up to 6.3 percent in January. Prices climbed by 1.7 percent in the month - the biggest monthly jump since the overthrow of former President Hosni Mubarak two years ago.

"These numbers do not take into account the billions that the government is in arrears to oil companies," Patterson said.

OPPOSITION CALL

London-based consultancy Executive Analysis puts Egypt's accumulated debt to oil and gas producers at $9 billion. As a result, several foreign energy producers have cut production in Egypt or are refusing to invest in raising output or to issue letters of credit, industry sources said.

Senior liberal opposition politician Amr Moussa, a former Arab League chief, called for the government and opposition to agree to postpone parliamentary elections expected in April for six months and work together on the economy.

Citing the falling currency reserves and stumbling IMF talks, Moussa called in a statement for an urgent "reordering of priorities to mobilise all capacities to confront the present serious situation".

He suggested that President Mohamed Mursi's government and the opposition, made up of liberal, social democratic, leftist and Salafi parties, agree on a four-point initiative to restore public finances, reschedule the energy debt, revive tourism and investment and shield the poor from extra burdens.

Moussa said Egypt needed a $12 billion credit line, with money from the IMF, World Bank, United States, European Union and other friendly states, listing Russia, Japan, China, South Korea, Singapore, Turkey, Malaysia and Indonesia.

He suggested the energy debt should be handled by negotiating a rescheduling of Egypt's arrears so it could resume exports and stop importing expensive oil and gas.

There was no immediate response from the government to his call, which political sources said was expected to be endorsed by several other opposition leaders in the coming days.

Gold Struggles to Hold 200 Day Average and Major Support

US 10 year treasury bonds under 2% again. Fed. indicates that their unemployment targets may not be reached until mid-2015. Ie keep the presses rolling. EU leaves rates unchanged, ie funds should flow away from the US$, US equity price increases may be stalling, China economic numbers surprise to the upside.

Gold breaks $1,700. Hold on ! gold is struggling to hold the 200 day moving average. Dangerous to short a market near major support so as a trader, I’ll keep my powder dry and watch it fall over the Northeast. Over the next 30 days there will be continued headlines that suggest a portion of your assets in gold is a prudent decision, but but we may get an entry point some $40 dollars lower.

Forex: USD/JPY consolidating below 93.50

FXstreet.com (San Francisco) - After breaking 93.00 in the European session and touching the 93.50, the USD/JPY is trading in consolidation mode following the latest bullish movement from 92.50. Currently the USD/JPY is trading at 93.25, 0.55% positive on the day.

The USD/JPY needs to break above 93.50 to attack the 93.70 and then retest the 94.00 area. On the other side, 93.00 level seems to be key area ahead of the 92.50 and 92.20.

Not much is expected today, but Japan will be publishing consumer confidence, machinery tool orders and GDP data during the week before Thursday's BoJ monetary policy decision. Given that current Governor Shirakawa is due to leave soon and the most anticipated meeting happened last month, little is to expect this time.

Trading Strategy for 11th Feb’13.Just Watch 5893 as Crucial Support.2nd Week will see Unexpected level.

The market is a curator of information. It does not always tell the story at the same pace that it gets the information. This is partly because, depending on the participants, different parts of the story makes sense or are not important, yet. It may be that the market does not care about that input or it may never care. It may take so long for the market to care that we forget about. Rarely, but it does happen that it forgets about it forever.
The prices it trades when the story matters and how much it changes is what speculators are looking for. The profit is found between the price when the story takes hold and how much the market reacts to it. The profit comes in being in the move and being in it at time when it still matters to your bottom line.
Getting shaken out of a trade is part of trading. My only suggestion is attempt to find what the market thinks is most important (usually a different market in a critical area or significantly stronger or weaker market). Have the bullets when price confirms the story, get out as the story and price changes or as your trading plan dictates.
Last Close : 5921.80
-On Friday Boldly written below 5963 level ,We see PANIC upto 5910-5893 level !!(It kissed low of 5900 )
From Last 4 Days we are writing :
Three Consecutive close below 5944 level will take to 5838—–5803 level !

Above is Weekly Chart of NIFTY FUTURE

Below 5941 level if stays……………We see PANIC upto 5838-5803 level !!
Today ,Just Watch 5910——————-5893 level.
If Breaks 5893 with volumes and stays for 15-20 minutes then MORE PANIC……… !!
Target :5838—–5821 level.
Hurdle at 5947 -3DEMA and Crossover and stays above will Create Intraday firework.
Major Hurdle at 7DEMA : 5978 LEVEL.

Yes ,2nd Week……………..will see UNEXPECTED level in Nifty Future 

Bank Nifty-Below 12448 it will favour Bears only.Sell LIC Housing ,KTK Bank ,IDBI…If u can

On Friday ,Again we had Boldly written : 12416 will take to 12287——————-12244 level in hrs only.
On Friday it kissed low of 12310 level in panic !!
(From RBI Policy Day ,We had Boldly mentioned Sell on Rise and Forget )Just see from 12974 to 12310 level in just 9 sessions.

Below 12448 level it will favour Bears only.Target :12131—————-12026 level !!
Again we are writing :On Rise Sell Sell SELL………………No if and But.Yes Intraday levels will Update to our Subscribers.

-Tons of Money Minted Last Week in these Stocks by Going SHORT !!
What Happened to SBI & BOB ? Real Jackpot of life.
As Expected other Bank stocks melted like ICE and it was complete Bloodbath.
Tons of Money Minted by going short in PUS Bank Stocks.

Remember our Levels :2305————–2273 level.Just see it kissed low of 2290 on Friday !!
(Now Decisive Break with volumes below 2273 for 15-20 minutes then ? )
Slide will continue to 2178-2146 level.
-Chances are very bright will take support between 2270-2280 level and U-turn should happen ?Will Update more to our Subscribers.

-1457——————1447 are Support levels.Yes ,Just have a eye on 1447 level.If Breaks with volumes and stays below then ?
Slide upto 1418————-1408 level on card.

On Friday boldly written to sell this stock……….Just see What Happened ??
Below 269 is stays and not crosses 271 level ……………..We see PANIC PANIC upto 258—-254 level.
On Rise Sell Sell !!

-Below 867 if sustains with volumes ………………then only FRESH Selling -
Target :849—–843 level !!
Yes ,Will Update more to our Subscribers.

Below 268 if trades with volumes………………………………then ??Sharp slide not ruled out.
We see PANIC upto 261–259 level in hrs only.
(Short Term Looking Tired )

PANIC to continue……………………………………….We see Slide upto 139—-132 level !!
101% ,Sell if u can !!

Stock market drifts lower to start the week

 U.S. stocks drifted lower in early Monday trading, pulling the Standard & Poor's 500 index back from its five-year high.

The S&P 500 slipped two points to 1,516. Nine of the 10 industry groups within the S&P 500 dropped. Financial-industry stocks, the exception, were barely higher.

The broad stock index ended last week at its highest level since November 2007, and has climbed higher for six weeks in a row.

The Dow Jones industrial average dropped 43 points to 13,948 a half hour after the opening bell Monday. Hewlett Packard is leading to Dow lower, dropping 16 to $16.71.The Nasdaq composite is down nine points to 3,184.

No economic reports are scheduled to be released Monday. And few big companies are scheduled to report earnings.

Loews Corp. said Monday morning that it lost $32 million in its fourth quarter, hurt by insurance losses from Superstorm Sandy and sliding prices for natural gas. The holding company, which has dealings in insurance, oil and gas and hotels, is largely controlled by the Tisch family of New York. Its stock sank 40 cents to $43.45.

The stock market raced to a stunning start in January. A last-minute deal in Washington to avoid tax hikes and spending cuts known as the "fiscal cliff" eased fears that the budget cuts could lead the U.S. into a recession. Markets soared in relief.

The Dow and the S&P 500 are up more than 6 percent for the year. The Nasdaq is up more than 5 percent.

In the market for U.S. government bonds, the yield on the 10-year Treasury traded at 1.95 percent on Monday, unchanged from late Friday. The yield began the year trading at 1.70 and has climbed steadily higher.