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India to move to market movement based oil prices

Praveen Bajaj — Fri, 25 Jun 2010 09:37:42 +0000

The Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, have decided in the meeting just now that India oil prices such as petrol and diesel prices will be determined by market.

Details of the same, as to how this exactly will be carried out will be disclosed later and we will update you on the same.

As of now, diesel prices have been hiked by Rs 2/ liter but eventually they will be market linked.Petrol prices will be hiked by Rs 3.50/liter the same time, LPG prices have been hiked by Rs 35/cylinder and Kerosene prices by Rs 3/litre. New prices will be effective by mid-night today.

Before the meeting it was speculated that EGoM may either decide to raise the prices or may go ahead with Petroleum Minister Murli Deora’s suggestion of oil price decontrol.

The move has been taken to reduce the oil subsidy burden on the Govt. The government has provided only Rs 3,108 crore towards petroleum subsidy in the current year against an estimated fuel subsidy bill for 2010-11 of nearly Rs 90,000 crore at an average crude oil import price—popularly called Indian basket—of $80 a barrel. If the prices of petroleum products were not revised, the huge subsidy bill could easily eat up the bounty the government received from the 3G and broadband auction.

This move of EGoM is likely to affect inflation adversely. Inflation is already at a high level (To read our May inflation update, click here). WPI inflation for the month of May breached the 10% mark coming at 10.16%. Though food articles are largely blamed for high inflation, but fuel index is also catching up fast. This move of EGoM is likely to put more pressure on inflation. However, Oil minister was of the opinion that the hike will have marginal effect on inflation and the hike will be absorbed by the consumer. An increasing inflation will put pressure on RBI to raise policy interest rates (What are policy rates?), may be even before First quarterly review of Monetary Policy towards the end of July.

G-Sec markets experienced selling pressure after the release of news and yields on benchmark 10 year bond, 7.80% 2020 bond rose to touch a high of 7.6368 from the close of 7.5682 yesterday. Towards the end of the day, yields have risen to as high as 7.67%.

Equity markets have taken this as a very positive note for oil marketing companies particularly HPCL and BPCL, which jumped 5.4% and 5.5% respectively from yesterday’s close. HPCL finally ended 13.66% up whereas BPCL ended 12.8% up on Sensex. Overall equity index have been on a negative side since morning and have not shown any significant movement to the news. Sensex was down 0.88% on the close of market.

Author:Praveen Bajaj

Weekly Equity update:June 19, 2010

Praveen Bajaj — Sat, 19 Jun 2010 18:07:16 +0000

Moved by strong IIP numbers last week, Sensex continued its upward journey, rising 273 points on the first day of the week. Equity markets almost ignored the high inflation number.

The buoyancy continued for the week and markets touched a high of 17,616 on Thursday, its highest since April 27. This was the 7^th consecutive day of positive close on Sensex. However on Friday, being dragged by the Reliance group stocks, markets slipped 46 points.

For the week as a whole, index rose to 17,570.82, rising 2.96% or 505 points over last week’s close. Factors driving markets were positive cues from European front and better than anticipated advance tax payment by the companies.

Foreign funds inflow has been good in the market with FIIs buying stocks worth $773 million of India equities so far in June against a selling of $ 2 billion in May. Markets have risen 3.7% so far in June.

Having risen 950 points in last 10 days, I expect markets to trade with a positive bias but at the same time chances of correction cannot be ruled out. 2 risk factors which might pull breaks are negative developments on European front and concerns of interest rate hike by RBI.

Author:Praveen Bajaj

Weekly equity update: June 12, 2010

Praveen Bajaj — Sat, 12 Jun 2010 08:20:33 +0000

After 2 consecutive weeks of gains, equity markets ended this week slightly below the last week’s level, loosing 0.3% or 52 points on Sensex to close at 17064.95.

First two days of the week saw markets plunging 500 points to a weekly low of 16617 due to concerns of deepening Eurozone crisis. But thereafter, Wednesday onwards, markets started covering up and in three days regained almost all of the lost ground.

Friday’s IIP data which showed a stronger than expected growth of 17.6% also helped the markets along with news that RIL will buy Infotel Broadband Services, which won all India broadband spectrum in an auction that ended on Friday. This led RIL to gain 3% on Friday to close at Rs 1,046.25.

The way in which markets have rebounded from the recent low along with strong production data and comfortable monsoon progress have put markets are on a strong footing. Unless there are fresh jitters from Eurozone and high inflation (scheduled to be released next week) we expect market to carry on with the positive sentiments of last 3 days.

Author:Praveen Bajaj

Weekly market update: May 3, 2010

Praveen Bajaj — Mon, 03 May 2010 13:51:35 +0000

Dear readers, if you will remember we used to post monthly market review till some time back. Modifying that a bit, we have come out with the weekly version of the update covering equity, currency, gilts, crude oil and a brief note on China interest rate move.

Equity markets

Sensex slid 135 points or 0.7% for the week to close at 17558. The index started the week on a bullish note but later in the week negative global sentiments created due to rating downgrade of Greek bonds pushed the market down by 1.7% on Wednesday.
Successive upward moves for the next two days helped the index to regain most of Wednesday’s loss. Federal Reserve of USA in its rate announcement re-iterated that “low interest rates are appropriate for an extended period of time.”
With earning season coming to an end, markets are looking towards international economy for direction. American and European indices closed in red on Friday which has led to a gap-down opening in Indian markets.
The news that EU and IMF have agreed for a bailout package for Greece will affect the markets positively. Markets are expected to remain range-bound with a positive bias and figures for cement sales and automobile sales will be watched closely.

Currency – USDINR

Rupee started the week with a strengthening bias opening 13 paise up from last week’s close of Rs.44.22 per dollar but gradually during the week it weakened along with weakness observed in the equity markets.
But towards the end of the week, buying from FIIs led to a strong come back in the rupee and it closed at its highest level in 2 weeks at Rs.44.25 per dollar, gaining 17 paise or 0.4% up from last week. This is the 4th straight monthly gain in rupee.
RBI Governor Mr. Subbarao said in Washington that steps might be taken to curb the excess inflow of funds in the Indian markets as surging rupee is hitting exports. This would restrict any major upside move in rupee for the week but we expect that the rupee will strengthen this week buoyed by the inflow of funds.

Government Securities (G Sec/Gilts)

6.35% 2020 benchmark bond registered very low volumes for the week as new 10 year bond was to be issued by RBI. Yields on 7.02% 2016 bond fell 10 bps on Tuesday on short covering and value buying.
Bond yields remained almost at the same level thereafter only to strengthen a bit before the auction results were announced on Friday, but aggressive pricing of new 2020 bond led to a sell-off in the bonds and the 7.02% 2016 bond closed at 7.55%, 11 bps down from previous week.
The new 7.8% 2020 bond has been seeing good volumes in the first half of trading on Monday. We expect the trading volumes to shift to the new bond and bond markets to trade with a slight upward bias as traders resort to profit booking and markets take cues from international markets.

Crude Oil

Crude oil opened the week on bearish note at $85.22 per barrel owing to concerns regarding Goldman Sachs case and growing uncertainty in the Euro region regarding Greece and fears of it spreading other Euro region economies. Crude fell for the first two trading sessions reaching a low of $ 81.70 on Tuesday.
Thereafter, crude showed a consistent rise over the entire week, rising $5 from the intraweek lows, ending the week at $86.15 per barrel on Friday owing to optimism regarding the Euro zone, pointing to a strengthening economy in the second quarter, lower unemployment figures in US and Greece readied severe austerity measures on Thursday to secure a multi-billion-euro aid from IMF and EU and avoid default.
Crude are likely to rise in the coming week as well, on expectations of strong international markets and announcement of bailout package for Greece of €30 billion by IMF and Euro region.

China interest rate move

The People’s Bank of China (PBOC) announced Sunday it was increasing commercial banks’ reserve requirement ratio (RRR) by 0.5 percentage points, taking the RRR of large banks to 17% and that of small- and medium-sized banks to 15%.
The increase, which goes into effect May 10, is the PBOC’s third such hike this year and is estimated to drain out about 300 billion yuan ($43.9 billion) in liquidity from the Chinese banking system.
The RRR hike is viewed as a fundamentally positive tightening measure, as it is still in the early part of the tightening cycle, which should help contain inflationary pressures, prolong the current economic expansion cycle and provide cushion for future policy flexibility.
The RRR hike is likely to have a modest immediate impact on banks’ margins as they are forced to park more funds with the PBOC at low interest rates. But subsequently, banks’ interest-rate margins were likely to improve, as tighter credit conditions would boost interest rates in the interbank money markets, where most of the listed banks are net lenders.

Hope this was informative. Your suggestions/comments would be highly appreciated.

Authors: Praveen Bajaj, MBA Finance

Abhijeet Ahir,MBA Finance

Annual Monetary policy 2010 – Highlights

Praveen Bajaj — Sun, 25 Apr 2010 11:18:42 +0000

RBI Governor Dr D Subbarao announced the annual monetary policy on Tuesday. RBI seems to have taken a more dovish stance than expected. Many analysts and market participants had expected a 50 bps hike in the policy rates. As expected, RBI took cognizance of the fact that inflation seems to be moderating and has opted to raise rates in steps rather than at one go. Inflation is the primary concern but at the same time it needs to ensure that high policy rates do not become a hindrance for growth. Following are the highlights of the monetary policy. Equity markets along with Government securities bounced back from the falling spree of last few days following the announcement of the policy.

CRR hiked by 25 bps; to absorb Rs. 125 billion from the system
Benchmark Repo and Reverse Repo rates hiked by 25 bps each to 5.25% and 3.75% respectively
SLR and Bank Rate kept unchanged at 25% and 6%, respectively
Bank credit growth expectations increased to 20% in fiscal 2011, compared to 17% in fiscal 2010
Bank deposit growth expectations increased to 18%, marginally higher than 17% reported in fiscal 2010
GDP forecast hiked to 8.0% with a positive bias for fiscal 2010-11 as compared with expected 7.2-7.5% in fiscal 2010
Inflation, as mesured by WPI, estimated to moderate to 5.5% by March 2011
Policy stance is to support “non-disruptive” growth in demand for credit while anchoring inflation expectations; to maintain an interest rate regime consistent with price, output and financial stability
Banks‟ investments in Non-SLR Bonds of infrastructure companies with residual maturity of more than 7 years allowed to be classified under HTM category
Provisioning requirement for sub-standard unsecured infrastructure exposures reduced to 15% from 20%
Scheduled Commercial Banks (SCBs) and Non Bank Finance Companies(NBFCs) with networth more than Rs. 10 billion to migrate to IFRS converged Accounting Standards by April 2013
Discussion paper on mode of presence of foreign banks by September 2010
Discussion paper on guidelines for new bank to be placed
Differential regulatory treatment for Core Investment Companies with asset size of over Rs. 1 billion

Click here to read our projections of the monetary policy.

Infosys Q4 results update

Praveen Bajaj — Wed, 14 Apr 2010 09:16:05 +0000

Infosys declared its fourth quarter result yesterday. The results came in line with the street expectations. Sales were around 1% above the Bloomberg consensus estimate, whereas the net profit was almost same as per the street estimates. Despite the fact the numbers are in-line with the street expectations; the disappointment is on the rupee guidance front, however the dollar guidance is positive.

Result highlights:

The consolidated net sales for the quarter ended March 10 was up by 5% to Rs. 5,944 cr, this was mainly on account of recovery the Financial Services Sector
Company’s net profit on a consolidated basis contracted by around 1% to a level of Rs. 1,600 cr, this is mainly on account of a higher tax out go. Since the company has provided a branch profit tax of Rs 232 cr for its overseas branches
Company’s operating margin remained fairly stable around 30.10% on account of increased utilizations
Company’s diluted EPS fell by around 1%, to Rs. 28. / share from Rs 28.29/share, a year ago
The company recruited 27639 employees in FY10 and has made 19000 campus offers for FY11
Its USD 200 million plus client was down from 2 in Q3 to 1 in Q4. Top 5 client’s contribution was down from 17.6% to 15.8% in Q4 versus Q3
Dollar Guidance:
- In dollar terms, the company expects 16-18% growth in revenues for the next year i.e. FY11. It expects revenues at USD 5.57-5.67 billion
- EPS growth at 4.3-8.6% for the next financial year
Rupee Guidance:
- In rupee terms, company lowered its guidance for FY11. It expects EPS at Rs 106.82-111.28 per share and revenue growth of 9-11%

I strongly believe that despite the fact the Infosys results and the guidance are muted the Indian IT sector will see out performance in the Indian equity markets as, due to expected rate hike by RBI, funds will start moving from rate sensitive sectors to rate defensive sectors.

Author name:Rahul Sonthalia, Research Head, Kredent

Indian equity markets:Overvalued Zone…?

Praveen Bajaj — Tue, 13 Apr 2010 10:16:33 +0000

Well some say that the Indian equity markets are all set to become mother of all the bull markets and from here there is no looking back. While others say that we are currently in a kind of over bought zone and a correction of at least 200-300 points in the Nifty index is definitely warranted.
While, what i see this is as the events holds the key to this. In the month of April there are three very important news flow that will shape the directions for markets:

The Q4FY10 earnings of India Inc.
Indian WPI for the month of March
RBI’s Q4 credit policy release on 20th April

While inflation is a cause of concern, given the way the food price and other key individual indices are behaving, this will also have a major impact on RBI’s Q4 policy guideline. I believe that there is a strong possibility of at least a 50 bps hike in the key policy rates. This I believe could be a problem story for the ever singing markets of ours.

On the other hand the corporate India is expected to show decent Q4 numbers, however much of this growth I believe is already factored into the stock prices and hence there is nothing much left on the table that should excite the investors. Infosys Q4 results tomorrow morning will set the stage for the rest of India Inc.

Hence, I strongly believe that instead of chasing the markets at a broader level, it makes sense to invest in good stocks with reasonable valuations.

As Mr. Lynch Says
“Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.” – Peter Lynch

Author name: Rahul Sonthalia, Research Head, Kredent

Rating upgrade, rate hike – Growth on track

Praveen Bajaj — Mon, 22 Mar 2010 09:03:49 +0000

Equity markets continued the uptrend with all major markets closing in the green for the week. The Sensex was up 500 points. On the global front, nothing much changed vis-a-vis risk appetite as stand-off over Greece continued to haunt the Euro, which shed 300 pips during the week. The week also saw concerns over asset bubble in China and more pressure being put on China to appreciate its currency. While the global outlook continues to be bleak over the sovereign risk, the domestic outlook gained a fillip with S&P raising India’s rating from negative to stable. This seems to be a reward for the fiscal prudence being followed by the government and also the stable economic and political environment. Inflation crossed RBI target of 8.5 % and was 9.89% for Feb 2010 prompting RBI to raise policy rates by 25 basis points. USDINR was in range for the week and did not break 45.60 and 45.33 on either side. We see continued consolidation in this range with importer buying and state-bids conflicting with the positive sentiment that would otherwise take the pair downwards.

Market Developments
Global Outlook

Equity markets sustained their upward move this week, with the S&P500, DJIA and the NASDAQ at new 16-month highs. The US economy is seen ahead of the curve and an interest rate hike may be looming large. The Dollar Index has resumed its uptrend and would probably see 82 levels in the medium term. The problems in Greece and speculation of asset bubble in China would reassert the status of Dollar as the safe haven. The week saw rhetoric from the all quarters on putting pressure on Yuan appreciation while on the Chinese side any further appreciation seems unlikely. It remains to be seen how this political risk unfolds.
The Euro was the worst-performing G10 currency through the past week of trade and resumed its downfall with its worst week in a while. The single pair dropped 300 pips during the week. The initial buoyant mood which took the currency with 1.3800 levels met with sellers and the currency suffered once again due to continued struggles with the Greek fiscal crisis and questions on the stability of the European Monetary Union. The lack of clarity on the situation and conflicts of opinion within the Euro Leaders is not helping the currency. Whether or not Germany can agree to any plan involving European funds may be of chief importance. Technically the Euro looks weak with up ticks still being sold. It has reached dangerous levels and if 1.3436 is broken simultaneously with indecision persisting on Greece then we would looking at 1.3000 and 1.2700 levels on the downside. Any level above 1.3750 continues to be good levels to sell the currency. Only a break of 1.3800 on a weekly basis would suggest any upside for now.
The British Pound also fell sharply during the week after rising momentarily to 1.5300 levels. The Cable saw across the board losses with comments from hawkish MPC members and also Andrew Sentence (BOE Member) warning a double dip recession. Jobless claims dropped by 36,000 vis-à-vis expectations of a rise of 6,000. Increase in upside inflation risks is being seen as a risk which might force the central bank to initiate end to quantitative easing. On the other data front, Mortgage approvals declined for a third month in a row, lending standards saw tightening with new loans declining from 48000 from 49000. Restrictive lending continues to a concern blocking growth. Another area of concern is the public net borrowing increasing by 12.4 billion. The overall deficit continues to grow and considering the concerns over troubled counterparts in the Euro-Zone UK could see its AAA rating at risk. Our outlook continues to be negative for the GBP with downside support at 1.4866 and 1.4784. A break of 1.4784 would set us up for a steep fall towards 1.4400 levels in the medium term.
Key data and events for the US are Chicago Fed National Activity (Monday), Existing home sales (Tuesday). On Wednesday markets would expect durable goods and new home sales. Initial jobless claims would be the highlight on Thursday while the final cut of 4Q gross domestic product and the University of Michigan sentiment index round out the week on Friday. In between Bernanke’s testimony on Wednesday would be the one to watch out for. Euro zone sees Consumer confidence (Monday) while French business confidence is due Tuesday. PMI indices, industrial new orders and the German IFO surveys are due Wednesday. Consumer prices –UK on Tuesday, UK budget release on Wednesday, retail sales on Thursday and business investment is scheduled for Friday.

Domestic Outlook

As discussed last week inflationary concerns continued to plague the policymakers and once the figure was out crossing 9%, the central bank wasted no time in raising the policy rates by 25 basis points. In the hindsight the timing seemed right with S&P upgrading India’s rating from negative to stable. The interest rate hikes, sustained economic recovery and capital inflows suggests more appreciation for the INR we continue to expect that 45.28 should hold in the near term. A confirmed break of 45.28 would set us up for 45.00 levels. Having said that year end importer buying and continued risk in the Euro –Zone could see the USD strengthening from these levels.

Currency markets at crucial point….

Praveen Bajaj — Mon, 15 Mar 2010 09:45:23 +0000

Markets seem to come out of the consolidation mode and increase in risk appetite saw the US Dollar being sold across the board. Almost all markets closed in the green and all currencies except the JPY saw strength against the greenback. The Dollar index closed below a key support level at 80 before closing 79.83. Sustained move below these levels would initiate further downside for the dollar. The Euro saw movement of 250 pips with 1.3800 being tested on Friday in the European market. The INR strength continues buoyed by strong fundamental coming on the back of a strong IIP numbers for a second month in a row. Movements on both side were very erratic with 45.38 levels bringing in importers and state bids while 45.63 level bringing further shorts into play. We would maintain an intraday range of 45.38-45.63 with bias tilted towards buying the dips. Technically 45.28 is yet to be tested and exporters are “not yet” panicking. Once exporters start panic booking with a simultaneous drop below the 45.28, it is likely to bring further downside.

Market Developments
Global Outlook

The US Dollar fell against all majors except the Japanese Yen, breaking out of its tight range against the Euro and testing its recent lows. A limited week of economic event risk initially left the heavily-traded currency relatively motionless, but the latter half of the week saw the Greenback considerably lower through Friday’s trade. The declines were perhaps surprising given a significantly stronger-than-expected US Retail sales report on Friday morning; robust spending gave modest hope that the US consumer may prove more resilient than previously predicted. CFTC data is mixed with Dollar’s net long positions fell from $5.58 billion to $3.99 billion, however Euro shorts rose to another record of 74551 contracts suggesting that 1.3800 would be hard to break. After the break of 80 levels in the dollar index we feel that 78.56 would a decisive level to watch. A busy week of economic event risk likewise promises considerable volatility in the days ahead.
EUR/USD was encouraged by better equity market and stronger than expected EU Industrial Production to hunt for stops through 1.3750, despite initially hampered by Russian selling. Prices made a run close to 1.3800, but lost momentum. Equity markets were majorly buoyant for the major part of last week with S&P 500 breaking January’s high of 1150. Nikkei managed to rise 382 pts to close at 10751. Markets are cautiously looking at the upside after the consolidation which has lasted for almost two months. However only a weekly close above the 1.3800 levels should show more upside. Market is still short ahead of FOMC next week and that’s going to limit dips within a range of 1.3600-1.3800.
The British Pound rose to 1.5200 levels and may continue to rise if the Bank of England is able to convince the markets about its current stance The British Pound may benefit if the BOE succeeds in branding themselves as standing truly at the center of the policy spectrum. Rating agency Fitch said the UK’s AAA credit rating may be jeopardized if it doesn’t do more about its fiscal shortfall reminding us that political risk could be a major factor in the United Kingdom.
Commodity currencies continue to be bullish on the backdrop of strong economic data from Canada, Australia and New Zealand. Australia is the first country to raise rates to 4%. RBNZ left rates unchanged at 2.5% and reiterated the already stated stance of removing stimulus in the middle of 2010. The key risk for commodity currency comes from the tightening policies to cool down China.
Key Data for the coming week are Euro-Zone Employment and US industrial production on Monday. Tuesday would be crucial with Euro-Zone CPI, ZEW survey, US Housing data and the most important FOMC rate decision (rate may not be hiked but the wordings need to be watched). On Wednesday we would see the UK Jobless and other unemployment figures for the UK with Thursday bringing focus back to the weekly jobless claims. Friday would see housing, retail sales coming out of various regions.

Domestic Outlook

USD/INR saw downside for most of last week, though dips below the 45.40 saw importer buying interest amid intervention fears as well. As a result of such buying interest some the pair staged some sharp rally towards the upside all of which faltered at the 45.63 level. SENSEX gains aided with the INR upside though stock market gains were trimmed on fears of rate tightening on strong Jan Industrial Production for a second month in a row.
Inflation data next week is to be the focal point and is likely to be higher on the backdrop of high weekly food prices. However we expect food inflation has peaked out and the same effect would be reflected on the WPI in the coming month which could settle in the range of 7-8%. The borrowing programme still being largely front loaded with almost 70% of the government borrowing being done in the first half is likely to keep yields in the 7.8 % levels for some time. On the whole we expect that the USD/INR to gradually tilt lower, but dips would not be very rapid till exporters start panicking. Broader range of 45.28-45.75 is seen being traded for now as the USD/INR consolidates with eyes on policy at home as well as external risks. Intraday range of 45.38-45.63 should hold as state bids and underlying strength of the INR unlikely to let the pair go either way. One more factor that might be a food for thought is that markets have started looking at the Real Effective Exchange Rate (REER) which is hovering at 112 against a historic high of 116. It remains to be seen how far the central bank stays on the side lines.

Indian Economy – Review and Analysis, February 2010

Praveen Bajaj — Sat, 06 Mar 2010 07:41:14 +0000

Readers, as promised, we have posted the market review for February without delay this time. Month of February witnessed the most important calendar event for Indian economy, the Budget 2010. Our reports on the same would have kept you updated. Hopefully this will update you about its affect on various markets.

Equity

After correcting for most part of January and early February, Sensex touched a monthly low of 15725 on Feb 5 and thereafter gained strength from positive news on the budget front. It touched a monthly high of 16669 on the day of budget and closed the month at 16429, about 2 % above the last month’s close and 4.5% above the monthly low.

Rupee

Taking over from the appreciating trend in the last month, rupee weakened in the first week to touch a monthly low of 46.94, loosing 110 bps in 3 trading days. But post that, appreciation again set in and buoyed by the bullishness in equity markets, rupee closed the month at 46.08, marginally up from last month’s close of 46.12.

G Sec yields

After moving in the range of 7.57 to 7.72 for the month of January, the yields on 10 year benchmark 6.35% 2020 bond surged during February. Yields touched a high of 7.96 during mid feb and thereafter corrected to rise again during the budget following announcement of market borrowing of Government for the year 2010-11 which were in line with expectation. Yields closed the month at 7.86 against a close of 7.58 for January.

Gold

Gold futures on COMEX for March delivery which fell in the later half of January were in red in the beginning of February as well under the influence of better than expected economic numbers of USA. But since second week of February, after touching a monthly low of $1,044.50/ Oz, gold prices started moving up and touched a high of $1,131.50/Oz before closing the month at $1,118.90, 3.3% above last month.

Crude Oil

Crude oil for March delivery on NYMEX continued its downward journey carried over from the month of January and touched a low of $69.50/ barrel. But with optimistic numbers from US, economic recovery seemed to gain strength and prices started rising touching a monthly high of $80.78 before closing at $78.84, 9.2% above the January levels.

Author: Abhijit Ahir, Economic Analyst, MBA Finance (SIIB)