Base metals shine, gold melts in a modest Samvat
Nov 01 2013 , New Delhi
Equities bounce back, MFs frustrate and agri-commodities rise
Spot gold on MCX has ended the Samvat with 3.46 per cent negative return, after clocking 25 per cent return on an average in past five previous Samvats. The curbs on gold import in a bid to reduce the import bill dampened sentiments. During the year, gold price hit a high of Rs 32,943 and a low of Rs 25,000 per 10 gm, before seeing a slight recovery. It stood at Rs 30,626 per 10 gm on Friday compared with Rs 31,829 in the previous Diwali. In the past five Hindu years, the price of the yellow metal had risen 19.16 per cent (Samvat 2068), 35.95 per cent (Samvat 2067), 24.49 per cent (Samvat 2066), 34.49 per cent (Samvat 2065) and 10.85 per cent (Samvat 2064).
Silver, which gave a spectacular 40 per cent return, on an average, in the past four years, plunged 20.72 per cent during this Samvat till Friday. The white metal kept expectations high after delivering 15.23 per cent return in Samvat 2068; 40.82 per cent in 2067, 40.81 per cent in 2066 and a whopping 62.92 per cent in 2066. However, it failed to replicate the past performance.
“Gold and silver had performed so well over the past several years that some correction was anyway expected. For gold, the macro-economic environment has changed and its appeal as safe haven has waned with better-than-expected recovery in the US,” said Kishor Narne, associate director and head of commodity & currency at Motilal Oswal Commodity Broker.
Base metals and agri-commodities
The price of Tin jumped 26.82 per cent to Rs 1,419.75 a kg on MCX on Friday against Rs 1,119.50 a kg last Diwali. It was followed by zinc (up 16.64 per cent) and lead (13.63 per cent).
“The tin counter generally has a low volume. Zinc and lead had underperformed during calendar 2010 and 2012. In fact, their prices had fallen below the cost of production, and thus some improvement was on the cards,” Narne said.
However, other base metals such as copper (up 6.39 per cent), aluminium (up 5.81 per cent) and Nickel (up 3.01 per cent) have failed to keep pace with them. The performance of agri-commodity was mixed, with chana, jeera, mustard seeds and turmeric losing between 4 per cent and 34 per cent of their prices. Coriander (40.53 per cent), chilli (13.60 per cent) and refined soya soil (9.11 per cent) fared well.
Equities and MFs
Among equities, BSE benchmark Sensex rose 13.85 per cent to 21,197 as of Friday from 18,618 on last Diwali (November 13 2012). It had gained 7.69 per cent in the previous Samvat.
The CNX Nifty rose 11.30 per cent in this Samvat compared with 8.94 per cent in the previous Samvat. One must note that a large number of retail investors who stayed invested in the midcap and smallcap indices burnt their figures during the Samvat.
The CNX smallcap index lost 11.90 per cent during the Samvat against a modest 2.77 per cent gain in the previous one. CNX midcap index gave 4.20 per cent return against 11.81 per cent in the previous Samvat.
“It was a pretty bad Samvat for equities. Barring few largecaps, no stock performed well,” said Tirthankar Patnaik of Religare Securities.
Mutual fund schemes fared even worse. Data available with NAVIndia showed barring global funds, which gave an impressive return of 36.36 per cent, all the rest failed to beat even bank FD rate of 8-9 per cent during the year. A recovery in the developed markets, especially in the US, helped global-focused mutual fund schemes to outshine the rest. Liquid funds (8.22 per cent), short-term income funds (7.87 per cent), diversified largecaps (7.51 per cent) and tax-planning schemes (6.51 per cent) gave modest returns. Gilt funds, which deal in government securities, rose 5.13 per cent while gold ETFs declined 9.30 per cent.