Gold prices to trade sideways to down this week, following import duty hike; support at Rs 51200 per 10 gm
时间:2024-09-29 02:30:00 阅读（143）
By Tapan Patel
Commodity prices traded lower with most of the commodities in the non-agro segment continuing to decline while crude oil prices remained exceptions with marginal gains. Bullion prices declined on market expectations over aggressive FED in July meeting and India import duty hike. Base metals traded weak on lower demand from China and global slowdown concerns along with stronger dollar. Crude oil prices traded firm on supply concerns and strong demand for the year.
Silver prices witnessed heavy sell-off with spot silver prices at COMEX plunged by 6% to $19.88 per ounce for the week. MCX Silver September futures fell by more than 3% at Rs. 57742 per KG for the week. Silver prices extended fall underperforming gold on weaker demand for industrial metals and heavy selling in base metals. The CFTC data showed that money managers have decreased their bullish bets in silver by 6816 to 5 week low.
Bullion fell almost 7% last quarter — the most in more than a year where Gold prices reported a third weekly decline and fell by 8% for the quarter ended in June. Bullion prices extended decline on rate hike expectations from US FED and other major central banks. The market players are expecting another 75 bps increase in interest rates in the upcoming US FOMC meeting. The stronger dollar and firm bond yields has dampened demand form non-interest bearing assets like gold and silver.
The dollar index rose by 0.91% at 105.14 for the week. The real blow on the precious metals prices came after India, the world’s second biggest bullion consumer, raised its basic import duty on gold to 12.5% from 7.5%. Silver prices plunged on market speculation of possible hike in import duty too. The move dragged international gold prices to seven month low while rupee depreciation and duty impact supported MCX gold prices to trade firm.
We expect gold prices to trade sideways to down this week with COMEX spot gold resistance at $1840 per ounce and support at $1780 per ounce. At MCX, Gold August prices have near term resistance at Rs. 52400 per 10 grams and support at Rs. 51200 per 10 gram. COMEX Spot silver has near term resistance at $20.80 per ounce with support at $18.70 per ounce. MCX Silver September has important resistance at Rs. 60500 per KG and support at Rs. 56000 per KG.
(Tapan Patel, Senior Analyst (Commodities), HDFC Securities. Views expressed are the author’s own.)
Services miss estimates; Software better than expected: Services business grew 0.6% q-o-q cc and missed HCLT’s Q3FY23 guidance, mainly due to a 3.8% q-o-q cc decline in the ER&D segment. Growth in the IT&BS segment moderated slightly to 1.6% q-o-qcc but was in line with estimates. BFSI and Life Sciences were the key growth drivers, while communications were the drag among verticals. Growth was led by the Americas region, while Europe and ROW posted declines.
Decline in bookings reflects delays in decision-making: HCLT won 10 large deals in services and three large deals in Software with net-new deal TCV of $2.1bn, down 8% y-o-y. Deal wins were driven by the services portfolio, were centered on cost optimisation and vendor consolidation and came mainly from BFSI, manufacturing and Life Sciences verticals. Management highlighted a ramp-down in discretionary spending in Hitech and communications verticals but pointed to a strong deal pipeline.
FY24 guidance in line with expectations: HCLT has guided for 6-8% y-o-y growth for overall business and 6.5-8.5% y-o-y cc growth in services segment and 18-19% margins in FY24—all in line with our assumptions. We maintain our FY24-25 cc revenue growth and margin estimates and expect HCLT to deliver 6.5% cc revenue growth and 18.4% margins in FY24. However, we lower our earnings forecasts by 2% to factor the higher tax rate indicated by the management.
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Raise PT: HCLT has fared better in Q4, particularly in North America and BFSI, unlike its peers. However, rising demand uncertainty as a US recession nears remains a concern. HCLT’s stock at CMP trades at 17x PE and offers a 5% yield, which in our view should limit downsides and derating. Hence, we raise our target PE to 17x (16x earlier) and raise our PT to Rs 1,125, offering 8% potential upside.
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