Oil Rallies As Gustav Approaches Gulf

Crude prices touched above $120 on Thursday morning amid concerns Tropical Storm Gustav could cause problems in the Gulf of Mexico's oil region. Light sweet crude for October delivery moved to $119.53, up $1.38 on the session.

Oil hit as high as $120.50 in the early going. Gustav is expected to become a hurricane again later today. Gustav is predicted to reach the Gulf of Mexico over Labor Day weekend, leading to concerns the oil supplies from the region could be disrupted. As a hurricane, Gustav reached landfall in Haiti on Tuesday afternoon, causing killer landslides. Crude oil gained for a third straight session on Wednesday, closing up $1.88 on the session. Traders considered the Department of Energy's mixed bag inventory report. Crude oil inventories decreased by about 170,000 barrels in the week ended Aug. 24. Analysts were expecting to see a build of about 1 million barrels. At 305.8 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Meanwhile, gasoline inventories decreased by 1.2 million barrels last week, and are below the lower boundary of the average range. Market players were expecting a drop of about 2.8 million barrels. Oil prices surged on Tuesday, adding $1.16 for the session. Prices had dropped as low as $112.36 in electronic trading, but later climbed as high as $117.89. Traders also considered a Department of Energy report that revealed lower year-over-year demand for crude oil in the month of June. On the economic front in the U.S., a Department of Commerce report showed that gross domestic product increased at an annual rate of 3.3 percent in the second quarter compared to the advance estimate of 1.9 percent growth. Economists had been expecting GDP growth for the quarter to be revised up to 2.7 percent. Also Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended August 23rd, showing that jobless claims fell to 425,000 from the previous week's revised figure of 435,000. Economists had expected jobless claims to fall to 425,000 from the 432,000 originally reported for the previous week. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian rupee slightly higher versus dollar as India's inflation declines to 12.40%

The Indian rupee gains a bit of ground versus the US dollar on Thursday morning in New York, following a government report showed that India's inflation, based on the wholesale price index fell to 12.40% during the week ended August 16 from 12.63% recorded during the week ended August 9.

Economists had expected the wholesale price index to grow 12.82% for the week under review. The Indian rupee that traded as low as 43.835 against the US dollar in early trading advanced to 43.445 by 8:45 am ET Thursday. As of now, the pair is trading near 43.73. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Weekly Jobless Claims Slip To 425,000

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended August 23rd, showing that jobless claims fell in line with economist estimates compared to an upwardly revised reading for the previous week.

The report showed that jobless claims fell to 425,000 from the previous week's revised figure of 435,000. Economists had expected jobless claims to fall to 425,000 from the 432,000 originally reported for the previous week. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar ticks up versus other majors following Q2 GDP, jobless claims reports

The US dollar gained ground against its major opponents in the early New York session on Thursday, following the release of second quarter GDP and weekly jobless claims reports. As of 8:35 am ET, the dollar was worth 1.0941 against the franc, 109.52 against the yen, 1.8329 against the pound and 1.4737 against the euro.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian market plunges ahead of release of key economic data

Thursday, the Indian market plunged following intense selling in bank stocks and Reliance Industries in late trading. After opening flat, the market drifted down into negative territory within a few minutes.

Trading remained choppy for the next few hours in the early session. Subdued opening of the European markets and intense selling in select index heavyweights dragged the indexes sharply down in the afternoon. The rebound in the price of crude oil to above $119 a barrel in Asian trading affected investor sentiment. The price of oil rose led by reports that the Tropical Storm Gustav could head towards the Gulf of Mexico region, which if it does, will affect about 85% of the US offshore oil and gas production installations. Traders remained cautious ahead of the release of wholesale inflation data and the GDP report for the 1st quarter. Analysts' reports that predicted a decline in the first quarter GDP growth rate weighed on market movement. Investors were hesitant to make purchases ahead of the release of the GDP report on Friday. Meanwhile, traders were also cautious ahead of the release of wholesale inflation data in the evening. The wholesale price index is forecast to have risen to a fresh 16-year high for the week ended August 16th. On the BSE, stocks across sectors ended in the red. Oil/gas, capital goods, public sector and metal companies were among the major losers. The market breadth was extremely negative, with only 898 stocks gaining compared to 1721 stocks that declined. After opening at 14,290, the BSE Sensex rose to an intra-day high of 14,347 in the early session. Towards closing of the day, the benchmark drifted to an intra-day low of 14,002, before finishing slightly better at 14,048, down 248 points or 1.74% over Wednesday's close. The small-cap index ended down 1.13%, the mid-cap index declined 1.36% and the broad-based BSE 500 index plummeted 1.51%. Meanwhile, the S&P CNX Nifty settled at 4,214, down 78 points or 1.82%. Reliance (down 3.45%), Reliance Infrastructure (down 3.15%), BHEL (down 3.12%), TCS (down 3.05%), Reliance Communication (down 2.98%), Larsen & Toubro (down 2.98%), Larsen & Toubro (down 2.91%), Wipro (down 2.67%), ICICI Bank (down 2.30%), Hindustan Unilever (down 2.17%), DLF India (down 2.08%), HDFC (down 1.97%), Tata Steel (down 1.65%), State Bank of India (down 1.61%), Mahindra & Mahindra (down 1.53%), HDFC Bank (down 1.46%), Tata Motors9down 1.22%) and ACC (down 1.12%) were among the major decliners. Only 6 out of 30 Sensex stocks, namely Maruti Suzuki, Satyam Computers, Ranbaxy Laboratories, Tata Power and ITC finished in positive territory. The Apollo Hospitals rose 1.66% after the company reportedly said it is in talks to acquire a 30 percent stake in a hospital in Nigeria for about Rs.52 crore. Tata Motors declined 1.22% following reports that work at its plant in Singur came to a halt as workers couldn't turn up for duty following threatening by the activists from the Trinamool Congress party. Sterlite Technologies declined 0.82% even as the company bagged four new orders worth Rs. 278 crore for supply of power conductors. Asian Tea & Exports gained 4.99% after the company's board recommended a stock split in the ratio of 10-for-1 for its shareholders. Apollo Sindhoori Capital surged up 9.55% after the board of directors of Aditya Birla Nuvo approved the acquisition of a 56% stake in the company. Reliance Industries lost 2.88% after the company confirmed media reports that it is planning to transfer 80% of its participatory interest (PI) in the D6 block in the Krishna Godavari (KG) basin to four unlisted subsidiaries. Mahindra & Mahindra fell 2.76% following reports that the company is in talks with Italian motorcycle and scooter maker Malaguti Moto for a possible takeover. Pyramid Saimira Theatre added 2.61% on reports the company is close to acquiring UK's oldest theatre chain Reel Cinemas, earlier Associated British Cinemas or ABC, for around Rs.200 crore. Oriental Bank Of Commerce declined 1.42% following an upward revision of 25 basis points in its prime-lending rate. Ram Kaashyap Investment shed 4.98% following the company's proposal to enhance its authorized capital to Rs.50 crore from the current Rs.25 crore. The company proposed to re-classify it existing capital by converting 4,00,000 (a part of) un-issued preference shares of Rs.100 each to 40,00,000 equity shares of Rs.10 each. Markets across the Asia-Pacific region finished mixed. Hong Kong's Hang Seng index plunged 2.29% and South Korea's KOSPI Composite index declined 1.32%, while Japan's Nikkei 225 index added 0.12% and China's Shanghai Composite index rose 0.34%. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar Eases Versus Euro; Q2 GDP, Jobless Claims On Tap

The dollar lost ground versus the euro and extended its run of choppy dealing versus the yen Thursday morning as traders braced for the release of a preliminary reading on second quarter GDP.

In the wake of yesterday's hawkish comments from European Central Bank officials, the dollar eased to 1.4775 versus the euro. With the retreat the dollar pulled further away from Tuesday's 6-month high of 1.4629. Even with the Euro zone economy seen slowing in the second half of 2008, Bundesbank President Axel Weber told Bloomberg that talk of a rate cut was premature. Weber instead opened the door for more rate hikes next year, insisting that "the inflation outlook has not improved." The number of unemployed in Germany fell 40,000 in August from July after seasonal adjustments, the Federal Employment Agency reported Thursday. The dollar was steady versus the sterling Thursday morning, staying within a penny of yesterday's 2-year high of 1.8285. The Nationwide Building Society said Thursday that house prices in the UK declined 10.5% year-on-year in August, severe than the 8.1% fall in July. House prices fell more than the 9.6% expected by economists. The dollar continue to show a lack of direction versus the yen, slipping to 108.80 before rebounding back to 109.35. The pair has been bouncing back and forth between 108 and 110 since hitting a 7-month high of 110.65 two weeks ago. At 8:30 am ET, the Commerce Department will release its preliminary report on second quarter GDP, which is the broadest measure of economic activity. "Second quarter growth will probably be revised up sharply - to about a 2.9 percent annual rate from the already respectable 1.9 percent originally reported," predict the analysts at UBS. At the same time, the Labor Department will release its weekly jobless claims data. Analysts are expecting initial jobless claims to slip to 425,000 from the previous week's reading of 432,000. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

New Zealand Market Closes Higher

The New Zealand stock market closed higher on Thursday after a volatile trading session. The market opened slightly higher, boosted by overnight gains on Wall Street, but lost ground as crude oil continued to rise for a fourth day.

However, the major averages staged a recovery in the afternoon session and moved into positive terrain. The benchmark NZX 50 index closed up 6.27 points or 0.19% at 3,324.80, ending a two-day losing streak. Meanwhile, the NZX All Capital Index rose 10.28 points or 0.31% to finish at 3,369.86, extending gains for a second trading session. Wall Street posted modest gains on the back of better-than-expected durable goods data. The Dow closed up 0.8% at 11,502, the Nasdaq advanced 0.9% to end at 2,382 and the broader S&P 500 climbed 0.8% to finish at 1,281. Crude oil continued to rise for a fourth day Thursday on fears about Tropical Storm Gustav entering the Gulf of Mexico as a powerful hurricane and disrupting oil and natural gas production. By 00:08 a.m. ET, oil was quoted at US$118.97, up 82 cents, after the contract for October settlement gained $1.88 to settle at $118.15 on the New York Mercantile Exchange. In the currency market, the New Zealand dollar closed stronger against the U.S. dollar. The kiwi gained after the U.S. dollar slipped from its recent highs and following a recovery in business confidence reported by the National Bank of New Zealand on Wednesday. The local unit finished the session at US$0.7056 compared to US$0.7025 late Wednesday. On the economic front, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June. However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. Top stock Telecom advanced 0.6% and Fletcher Building, the third best stock, added 0.4%, while second-ranked Contact Energy lost 0.5%. In the retail sector, Hallenstein Glasson gained 1.8% and Pumpkin Patch surged 5.8%, while Jewelry retailer Michel Hill fell 1.1% and The Warehouse Group declined 0.9%. In the energy sector Vector plunged 3.0% after surging 2.6% Wednesday on the back of robust results reported by the company. TrustPower climbed 1.2%. ANZ edged up 0.3% after the country's largest bank reported a 10% increase in after-tax earnings to NZ$870 million for the nine months to June. The increase came, despite a three-fold rise in bad debt provisions to NZ$167 million. Nuplex rose 1.6% after the resins maker reported an 84% jump in after-tax earnings to NZ$48.3 million for the year to June. The company also provided a confident view of future prospects. Among other major gainers, AMP surged 3.8%, Fisher & Paykel Healthcare advanced 1.7%, Auckland International Airport rose 1.5%, Infratil climbed 1.8%, The New Zealand Refining Co added 1.0%, Pike River Coal jumped 2.2%, SkyCity Entertainment soared 3.5%, Tourism Holdings gained 2.8%, and Westpac Banking Group moved up 3.6%. Losers also included Rakon 2.1%, Property For Industry 2.6%, NZX 2.3%, Methven and Kiwi Income Property Trust 1.8% each, Lion Nathan 1.9%, ING Property Trust 2.5%, Guinness Peat Group 2.8%, Goodman Property Trust 2.6%, and Goodman Fielder and Fisher & Paykel Appliances 1.7% each. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian market volatile in opening session

After opening flat, the Indian market is currently trading in negative territory. Trading remains range bound and analysts expect more volatility during the day ahead of the expiry of August series derivatives contract and the release of wholesale inflation data in the evening.

As of Wednesday, marketwise rollover of positions from August to September series reportedly stood at 62%, while that of Nifty was seen at 56%. The rollovers were in-line with those in previous month, but the premium on futures is considerably reduced. The market is volatile and is trading in a very narrow range amid alternate bouts of buying and selling. Realty, public sector and metal companies are leading the decliners, while consumer goods and auto stocks are showing notable gains. After trading in a narrow range of 14,347- 14,279, the BSE Sensex is currently at 14,244, down 53 points or 0.37%. The S&P CNX Nifty is trading at 4,274, down 0.41%. On the BSE, the mid-cap index is down 0.27%, the small-cap index is declining 0.13% and the broad-based BSE 500 index is down 0.28%. The market breath is slightly negative, with 748 stocks advancing compared to 787 stocks that are declining. Sterlite Industries (up 1.48%), Maruti Suzuki (up 1.21%), Tata Motors (up 0.88%), Reliance Communication (up 0.86%), Satyam Computers (up 0.83%), Jaiprakash Associates (up 0.80%) and ICICI Bank (up 0.74%) are among the major gainers. Meanwhile, DLF India (down 1.21%), Grasim Industries (down 0.70%), ONGC (down 0.58%) and ITC (down 0.54%) are the major decliners. Sun Pharmaceutical is up 0.16% after the company won a case in an Israel Court filed against it by Taro Pharmaceutical. Vishal Retail is adding 0.40% after the company said it has opened four new showrooms during the last week. Marksans Pharma is rising 4.90% after the company decided to acquire the entire shareholding of UK's leading generic pharma company M/s. Relonchem Marksans Pharma. BAG Films is up 0.63% after the board of directors allotted 46,00,000 equity shares of Rs.2/- each, by conversion of 46,00,000 warrants, to Anu Films and Communications Pvt. of New Delhi, at a price of Rs.13 per shares (including a premium of Rs.11 per shares). Sundaram Fasteners is up 1.49% after the company acquired a 52.94% equity share capital of Sundaram Non- conventional Energy Systems Ltd (SNES). Choksh Infotech is up 3.19% after the company said its board will meet on August 30th to consider the acquisition of a software company. K Sera Sera Productions is declining 0.24% after the company said its board would meet on August 28th to consider the issue of equity-linked instruments. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Open: EZ Consumer Confidence to Remain at 5-Year Low

Written by Ilya Spivak, Currency Analyst

The Euro moved higher overnight, testing above the 1.48 level. Sterling retraced some of the heavy losses seen in US hours, rising to re-test the 1.84 level. Australian Private Capital Expenditure surprised to the upside, printing at 5.7% in the second quarter versus 2.0% expected. Tonight's calendar is laden with Euro Zone economic data releases, though forex traders are unlikely to see them produce substantial deviations from established themes. Interestingly, recent weeks have seen the Euro under pressure even though monetary easing seems far from imminent. This could suggest that price action is attempting to guide the ECB, acting as if the bank will soon be compelled to cut rates sooner.

Indian rupee falls from 2-day high against US dollar

The Indian rupee that showed strength in early Thursday's Asian trading against the US dollar reversed direction after hitting a 2-day high of 43.4250 by about 8:10 pm ET.

The dollar-rupee pair is currently worth 43.80, compared to 43.7450 hit Wednesday in New York. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

US dollar off 2-day low against South Korean won

The US dollar that hit a 2-day low of 1078.05 against the South Korean won at about 8:05 pm ET Wednesday strengthened thereafter.

The dollar-won pair that closed yesterday's New York deals at 1083.70 is currently quoted at 1082.25. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

JAKARTA (Thomson Financial) - Indonesian shares are expected to open higher on Thursday, supported by Wall Street's advance overnight as fresh data indicated the U.S. economy could be stronger than some investors thought.

The Dow Jones Industrial Average gained 0.8 percent on Wednesday as investors cheered the bigger-than-expected increase in orders for big-ticket manufactured goods.

Commodity stocks are likely to lead the advance on the back of a rebound in some commodity prices such as crude palm oil and nickel in line with a rise in crude oil.

'I see a good chance for the market to go up today. The rise in commodity prices such as CPO and nickel should revive interest in commodity stocks,' Recapital Securites analyst Poltak Hotradero said.

Oil prices surged Wednesday as tropical storm Gustav appeared headed for the Gulf of Mexico and its oil and gas installations. New York's main contract, light sweet crude for delivery in October,

climbed 1.88 dollars to close at $118.15 a barrel.

On Wednesday, the Jakarta composite index closed up 23.52 points or 1.1 percent at 2,131.63.

roffie.kurniawan@thomsonreuters.com

New Zealand July M3 Money Supply Growth Improves

Thursday, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June.

However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. The central bank said M3, excluding funds from non-residents, moved up 9.8% annually, the same as in June. Meanwhile, M3, excluding repurchase agreements climbed 7.9%, following a 7.8% rise in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

New Zealand July M3 Money Supply Growth Improves

Thursday, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June.

However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. The central bank said M3, excluding funds from non-residents, moved up 9.8% annually, the same as in June. Meanwhile, M3, excluding repurchase agreements climbed 7.9%, following a 7.8% rise in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

Euro soars to 4 1/2-month high against UK's sterling

Thursday in Asia, the European currency showed strength against its major counterparts. The euro thus rose to a 4 1/2 - month high against the British pound, 3-day highs against the currencies of US and Japan and a 2-day high versus its Swiss counterpart.

Against the US dollar, the European single currency traded higher during early Asian deals on Thursday. At about 10:10 pm Eastern Time, the euro hit a 3-day high of 1.4793, compared to 1.4728 hit late New York Wednesday. The European currency rose to a 4 1/2-month high of 0.8062 against the British pound at about 9:55 pm ET Wednesday. The euro-pound pair that closed yesterday's North American session at 0.8025 is now worth 0.8053. Against its Swiss counterpart, the euro gained ground after hitting a low of 1.6147 at about 7:30 pm ET Wednesday. The euro-franc pair is currently trading at a 2-day high of 1.6178, compared to yesterday's closing value of 1.6166. The single currency showed strength against the Japanese yen during early Asian deals on Thursday. At about 10:00 pm Eastern Time, the euro- yen pair reached 162.04, up from Wednesday's close of 161.28. This set a 3-day high for the pair. As of now, the pair is worth 161.76. Traders will have a busy European session today, in which German ILO Unemployment Rate, Italian Producer Price Index for July and the Euro -Zone Consumer Confidence for August are expected. Across the Atlantic, the US Q2 GDP is expected to influence trading in the New York morning. Data released since the advance (first) estimate of Q2 GDP has implied stronger growth in the quarter. We look for GDP to be revised up 1.0pp to 2.9 percent q-o-q ar, predict the economists at Lehman Brothers. The majority of the upward revision should be in trade and inventory, leaving domestic final sales unchanged at 1.3 percent. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserv

Look For Small Changes in GDP: Lehman Brothers

Data released since the advance (first) estimate of Q2 GDP has implied stronger growth in the quarter. We look for GDP to be revised up 1.0pp to 2.9 percent q-o-q ar, predict the economists at Lehman Brothers.

The majority of the upward revision should be in trade and inventory, leaving domestic final sales unchanged at 1.3 percent. The trade deficit narrowed considerably more than expected in June, suggesting an even bigger contribution from trade of 3.4pp versus previously reported 2.4pp. The monthly inventory data imply a slightly smaller drop in inventories which should bring the drag to GDP to a still-high 1.7pp.

 
 

Elsewhere, we expect a few small revisions. Most notably, consumption is likely to be revised slightly higher while non-residential investment in structures looks likely to be revised lower.

 
 

A significant contribution from trade was the main driver of growth in the second quarter. However, looking ahead to the next few quarters, we expect the contribution from trade to fade as the dollar strengthens and the global economy weakens.

 
 

In addition, we expect even weaker domestic demand with an outright decline in consumption in the second half of the year.

 
 

Corporate profits, which will also be released with the Q2 GDP revisions, are expected to have declined by 6 percent q-o-q ar, or 6.2 percent y-o-y. Operating earnings were actually up slightly for S&P 500 companies on the quarter, but we believe smaller and non-public firms will keep economy-wide profit growth in negative territory.

 
 

 Initial jobless claims likely fell to 420,000 in the week ending August 22, down from 432,000 in the previous week. The distortion to claims from the recently enacted extension of unemployment insurance benefits appears to be gradually fading. We expect claims to gradually drift down to around 400,000 over the next two to three weeks. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Philippines Q2 GDP +4.6 on Year

The economy of the Philippines increased by 4.6 percent in the second quarter compared to the previous quarter, the National Statistics Office said on Thursday. That's down sharply from the 5.2 percent annual expansion in the previous quarter, and it also came in below the wide range or forecasts that predicted an increase of between 5 and 5.9 percent on year.

Agricultural output in the Philippines, which makes up about 40 percent of total GDP, climbed 5.4 percent on year in the second quarter as production of the country's main rice crop was boosted by early rains. Overseas remittances were up 17 percent on year in the first half, with annual remittances in June alone climbing a record 30 percent. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.