Crude cruises as stocks suffer bruises
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Wall Street suffered a setback in terms of losses to the indices as
crude oil continued to quench the thirst of the speculators, hitting
another life time high to close at USD 123.53 on NYMEX. Dow Jones
suffered a 206.48 loss to end the day at 12,814.35 and Nasdaq was down
by 44.82 points to close at 2,438.49. Japan and Australia opened today
on the lower side given the global cues. Surprisingly the Japanese
stock market, Nikkei Stock Average has climbed 12.6 percent since
April 2008, the biggest gain among the eight leading markets in Asia.
Indian Markets are showing significant weakness from the last couple
of sessions though huge losses are yet to be seen across the board. We
expect weakness to continue further but not expect panic selling.
Crude, the Culprit
Though there are many global political implications on the crude price
we wish not to get into the analysis given the scope of the Indian
market. Many say Crude is running high on global consumption
especially India and China but statistics does not support the above
version. We believe crude is on the verge of a huge bubble burst
though finding a "Top" is definitely not possible.
Indian Oil companies started showing good strength yesterday with
Cairn India leading the way with Hindustan Oil Exploration following
suit. We believe this space is likely to witness huge fund interest in
the coming days and we bet on domestic consumption here irrespective
of global prices these companies are here to stay and make hay.
The list goes on but our favourites in this space include Cairn India,
Reliance Petro, Hindustan Oil Exploration, Selan Exploration,Shiv Vani
Oil and Great Offshore. Sectors that are likely to impacted by the
crude spike include fertiliser, textiles, pharma, automobile, tyre,
paints and aviation.
Market Close Box
BSE Sensex 17339.31 -33.70
NSE Nifty 5135.50 -9.15
USD Rs.41.20
Oil Nymex $123.5
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