Commodity Online MUMBAI: Why is the financial market behaving like this way? After being in turmoil for nearly two months, it looks India's financial market is getting ready to fire. The benchmark Bombay Stock Exchange Index (Sensex) reached its highest in six weeks.
But as the stock markets go up, commodities prices are going down. Gold is reaching lower levels, almost daily. Here are some trends on the Indian and global markets.
For the first time since June, gold fell below $900 an ounce. Gold futures for December delivery fell $21.80, or 2.4 percent, to $886.10 an ounce on the Comex division of the New York Mercantile Exchange. Silver futures for September delivery dropped 56.8 cents, or 3.3 percent, to $16.572 an ounce. Silver is still up 11 percent this year, while gold has advanced 5.7 percent.
A weak economy, weaker employment and financial instability will delay any increase in borrowing costs, the US Fed conveyed so when it kept its benchmark interest rate at 2 percent.
A retreat in crude oil prices pushed the stock index with Standard & Poor's 500 Index gaining 35.87 points, or 2.9 percent.
Economic slowdowns in the U.S., Europe and China are likely to lower the demand for oil and bring prices further down. Oil traded near $118 a barrel losing as much as $28 since its high of $147 on July 11.
Optimists who foresaw the country’s fiscal deficit narrowing with falling energy prices and a strengthening rupee led the Sensex towards its old glorious peak.
Domestic demand for gold continued on Tuesday, but gold consistently fell about 2.7% on global cues.
The rupee also had some good news. With falling energy prices, and again optimistic views that dollar demand would be lesser, the Rupee strengthened by 0.24 paise higher closing at 42.240.
