Rupee, Dollar and Gold articles and interviews

Strong global cues and a robust performance by Reliance Industries Ltd (RIL) today spurred share indices to record levels for the eighth time in 10 days.

The BSE sensex scaled a new peak of 15330.73 before closing the day at 15272.72, a net rise of 180.68 points, or 1.20 per cent, over yesterday’s close of 15092.04.

RIL, which has the largest weightage of over 12 per cent on the sensex, today ended at Rs 1,768.50, a gain of around 3 per cent, or Rs 49.60, over its previous close.

It came a day after the government approved the group’s special economic zone in Navi Mumbai.

Brokers said liquidity in the markets, particularly from foreign institutional investors (FIIs), was also strong because of positive expectations from the quarterly numbers of various companies. The sentiment also improved with the government announcing a relief package to exporters who have been hit by the appreciating rupee against the dollar.

FIIs have pumped in about Rs 7,845 crore into equities so far this month.

The markets opened on a strong note because of favourable global cues. The firm trend on Wall Street yesterday was followed by a sharp rally in Asian markets today. The Hang Seng ended up 290.27 points, the Kospi 53.18 points, the Nikkei 254.81 points and the Singapore index 30.05 points.

Metal shares continued to hog the limelight. Analysts said their gains came on expectations that the industry would see more consolidation after Rio Tinto offered to buy Canada’s Alcan. While Hindalco Industries rose 6 per cent to its highest close in five months, Tata Steel saw gains of around 3.5 per cent to close at Rs 694.75.

Infosys also saw some buying because of unconfirmed reports that it might bid for Capgemini.

Saravanan K of Sushil Global Commodities feels that gold will stay at around 8,820-8,825 in the Indian markets. He maintains a price target of 17,000 on pepper.

Excerpts from CNBC-TV18's exclusive interview with Saravanan K:

Q: What would you do with gold; does it show enough promise to break 670?

A: I would play a hedge bet here. As long as it holds above USD 665 area, I think we can target the USD 670-671 area. But those areas will be a good area to sell again with stops above 675. I think we are going to get stuck in the 660-671 areas for quite some time.

Q: What�s the level for Indian trader, rupee trader?

A: 8,820-8,825 on the Indian market should be a pretty strong area. I don�t think it is going much beyond that, another Rs 20-30 that side. On the lower side, we should be back to around the 8,700-8,680 area.

Q: How would you play crude at this time; we have seen a high of 73.8 yesterday, well below 73 now? What kind of range are you seeing for the next week now?

A: I think the recent announcement of IIA (Inter-Institutional Agreement), Iran crashing out some sort of an agreement on the nuclear issue - I think geopolitical risk premium, which is attached to crude prices, now would be down a little bit. I think we should be get another USD 1 or USD 1.5; should be removed from the prices currently. Dips to 69 or 69.50 in the slightly longer term will be feasible here. Higher levels beyond 73 is not likely unless there is a risk to geopolitical tensions again which I don�t think at this point would.

Q: Coming to agro commodities spices has been moving quite strongly in the recent days, pepper of course, has a lot of bullishness to it. What kind of uptrend are you expecting in weeks to come?

A: The price target of 17,000 still remains on pepper. These areas are pretty good areas to accumulate and keep buying. At least on the MCX August chart � August prices, I think 14,800-14,700 will be a pretty strong area. I don�t think it is going to break below the 14,700 area. I think we should see some 15,700-15,800 in the initial stages and then probably a rush to 16,500-17,000 in short term.

Working Indian women are driving sales of lighter, more adaptable gold jewelery over the clunky necklaces and earrings their mothers would keep in a bank vault and only dust off for weddings and birthday parties.

Many want jewelery that fits with increasingly professional lifestyles, things they can wear in the office as well as to the temple, a leading retailer told Reuters in a telephone interview.

"These women look up to the western world and they have that kind of money," said Shrikant Zaveri, chairman of Tribhovandas Bhimji Zaveri, one of India's most respected gold jewelery houses, which first opened its doors in 1864.

"The trend has definitely shifted to everyday wear jewelery," he said. "Today, women don't want to buy jewelery to keep in the safe. They want to wear it."

Zaveri said even in wedding purchases there had been a pronounced shift in preferences.

"If they want to buy a bridal set, they buy three to four of smaller and trendier sets at one go," he said.

Demand for jewelery made out of metals like platinum was growing, but not at the cost of gold sales, he said.

Nearly a fifth of global gold output makes its way to India, which gobbles up 800 tonnes a year, mostly in the form of jewelery.

Traditionally, Indians have bought gold for weddings or to be worn during religious festivals or as an investment.

India's gold jewellery sales are likely to remain firm up to March due to purchases during the country's main marriage and festival seasons.

They had dipped in April when prices surged to an 11-month high of $696.30 an ounce, Zaveri said.

"There was a drop in demand when the gold prices had really shot up, but it has picked up since then," he added.

Gold prices are hovering near five-week highs, with spot gold at about $666.40/$666.90 an ounce in New York on Thursday.

"If prices stabilize, I am seeing a growth over last year," Zaveri said, adding sales could surge an annual 20 percent.

India's jewelery consumption rose 47.8 percent to 147 tonnes in the first quarter of 2007, the World Gold Council said.

"I don't think the prices would rise. Due to a weak dollar and strong rupee, prices would remain in the same range," Zaveri said. "There will be no let up in jewelery sales."

The Indian rupee has gained more than 9 percent against the dollar since the start of the year, and touched a nine-year high of 40.28 rupees per dollar in late May.