VR Logo

Goldsmiths On Work This Week

Gold ETFs ended the week with a bang while banking funds turned out to be the worst performers

Let's begin with some good news. Last week saw the celebration of Akshaya Tritiya on Wednesday and Thursday. Buying gold on Akshaya Tritiya is believed to invoke prosperity. Well, it did invoke prosperity for the Gold ETFs. Their losing streak came to an end and the category gained a phenomenal 5.64 per cent for the week ended May 10, 2008.

But the bad news is that the Sensex retreated from the 17,000 levels and ended the week at 16,737, down by 4.90 per cent. Nifty also had a similar fate; it ended the week at 4,982, down 4.70 per cent.

While Gold ETFs gained the most, the banking funds were the worst performers. The banking category funds on an average shed 5.59 per cent, followed by the equity diversified category which lost 3.93 per cent. The BSE Banking Index fell by 6.9 per cent.

For the 1-year return category, banking funds generated 35.08 per cent, followed by Gold ETFs with 29.05 per cent. The technology funds were the worst performers with negative returns of 15.05 per cent. Even in the 1-month return category, technology oriented funds on the average gave only 8.13 per cent.

All equity oriented funds declined, while debt funds gained marginally. In the Equity diversified category, LICMF Equity tumbled by 6.48 per cent, followed by Principal Junior cap which lost 6.32 per cent. All diversified category funds declined, except the newly launched DSPML Natural Resources and New Energy Fund, which gained 0.94 per cent over the week.

Asian stocks also fell this week, snapping a two-week rally, led by banks and oil refiners on concern earnings at banks and automakers will slow with record oil prices and a slowing US economy. Crude oil prices touched a record $126 per barrel. Back home in India, Inflation flared to a 42-month high of 7.61 per cent. The government on May 07 banned futures trading to four more agriculture commodities -- gram, soya oil, potato and rubber. The government has promised of more fiscal steps to rein in inflation. The government succeeded in arm-twisting steel players, thereby forcing them to reduce prices and the government is in talks with cement players. More bad news in the pipeline