Mining Stocks take a Toll Due To Plunge in Copper Prices

The concerns over the slowing global economy complimented with the excess supply saw a major slide in the prices of copper. The shares of coppers miners dipped low in the morning trade and future prices of the copper saw a major upheaval wherein tumbled down to a 5 year low. Wednesday drop is incidentally the sixth consecutive decline the copper prices and currently the copper are trading at $5,560 per ton. The sudden and steep decline in prices is causing a significant pain to major mining companies like FCX, Glencore and others whose stocks has taken a beat down by recording a massive low.

The Major Copper Producers Take A Hit

Freeport McMoRan Inc known as FCX which is the largest copper producer listed on stock exchange saw a massive decline of 9.5%. Freeport shares are now at trading at $19.05 which is its lowest registered price since April 2009. Even the other suppliers of the metals shared the same fate and fell considerably low. Glencore Plc (GLEN) which is the third largest producer saw a drop of 12% in London while the First Quantum Minerals fell by 27% in Toronto.

A Kazakhstan copper producer Kaz Minerals Plc (KAZ) also registered a fall by 23% in London while Vedanta Resources Plc (VED) which a giant producer of copper in Indian and Zambia fell by 20% followed by Antofagasta Plc (ANTO) registered a drop of 13%.

Drop In Copper Prices Raises Concern

Investors are keeping a keen interest in the fate of the copper prices which doesn’t seem to have any silver lining for the moment. This precious metal is characteristically referred as ‘Dr. Copper’ due to wide spread usage in various industries. Copper is the recent entrant in the club of commodities market which had registered a sharp plunge in its rates globally after the fall in the prices of the oil. Just like the oil, copper tend to have deep impact upon the world economy as it is key element for the phone lines, cables and other infrastructures. The world largest copper producers are in order of their production ability are Chile, Chiba, Peru, US and Australia.

The sudden and deliberate fall in copper price is a major concern and it is seen as a domino effect rising due to considerable rout in oil prices. It is now spreading to other commodities which include copper as well. This is also perplexing and points towards the imminent slowdown in global economy which is deeper than thought and certainly it wouldn’t be limited to energy market.

World Bank Shows A Slow Global Economic Forecast

Owing to the steep drop in prices of various commodities the World Bank has cut down its global economic growth forecast to just 3% from the 3.4%. The data of Wednesday even pointed out that the December retail sales had declined much more than expected earlier. The price fall in crude oil had made investors quite uneasy about holding on to the energy stocks and their shedding of those would inevitably lead to more losses in various commodities which includes coppers as well.

Apple Market Cap Crosses $700 Billion Mark

The tech giant Apple has made new inroads by reaching the symbolic milestone of $700 billion of market capitalization for the first time. It is also major milestone for the CEO Tim Cook who saw the Apple through doubling its market cap in just three years. Tim Cook held the reigns of Apple in the August 2011 when its founder Steve Jobs officially stepped down from his post just two months before his sad demise due to cancer.

Apple Stocks Shows Advance Rise With This News

Apples stocks are getting stronger with each successful measure used by the company. In September after the launch of widely successful iPhone 6 and iPhone 6 Plus the Apples share shown a record jump of 21%. The iPhone range has long been the principal company’s earning juggernaut. But Apple is now ready to bring new products and services for the first time in many years.

The technology market is buzzed with the arrival of the much-hyped Apple Watch and the new Apple Pay which mobile payment solutions. Apple Pay service became available in October while Apple Watch which is eagerly awaited by the consumers is set to debut for sale in 2015. Market analysts are divided regarding the potential of the popularity of the new wearable device but Apple shares are still going higher regardless of it.

Better Products and Service Behind Rising Valuation

The latest versions of iPhone released by the Apple a few months back have been driving up the company’s value. It even posted a record opening weekend through selling more than 10 million units. Market Analysts are predicting that the Apple would continue to sell its iPhone at an aggressive pace in the upcoming holiday season. Market analyst forecasts that Apple would be able to sell around 71.5 million iPhones in its fourth quarter.

Microsoft Still Hold The Record For Highest Market Cap

Apple has become the first S&P 500 company to reach the $700 billion market capitalization mark. However it still has a long way to go to become the most valuable company of all time. At present this feat is in the name of Microsoft which at its market cap peak was of $613 billion in 1999, on an inflation-adjusted basis it converts into a whopping $874 billion in 2014.

Apple Market Cap Bigger than GDP’s of 19 Countries 

Currently the Apple’s market cap is much higher than the gross domestic product (GDP) of as many as 19 countries in the world. According to the data released by the World Bank on GDP, it appears that Apple Inc is just behind the Saudia Arabia which has a GDP of $745 Billion and it is ahead of Switzerland which just has GDP of 650 million.

Apple Record Seem Cheap Through Historic Measure

When Microsoft was at its peak it was trading at 72 times earning according to the Nasdaq and Factset data. But Apple’s price-to-earnings ratio is just 18 even though Apple’s revenue is increasing by a healthy 15 % and its earnings by 20%.

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?
During the 20^th century, investments in the real estate showed steady returns. Sometimes the price rise is fast and sometimes it is slow. But the rate of return is some what better than the Fixed deposits and also above Gold. But is somewhat riskier than fixed deposits.
Likewise, Investments in the Gold also showed good returns and at times it is stagnant. It sometimes performed better than fixed deposits and at times it is under performed when compared to fixed deposits. But is riskier than fixed deposits.
Investments in the Stocks is the riskiest of these investments. But the returns were phenomenal during the Bull Market and it showed negative growth in bear markets. But on Average, it performed better than other investment avenues. But the risk factor is much more in Stocks.
My investment plan would be to invest 30% in Stocks, 30% in Real estate, 20% in deposits and 20% in Gold. Any investment plan should take into consideration atleast 5 years time frame. And the best way to invest is to invest at bear markets.

How Interest rates affect the Stock Market?

How Interest rates affect the Stock Market?

Interest rates are the percentage at which the Lenders lend the money to creditors. The lenders may be Banks or Individuals or Financial Intstitutions. The creditor may be any one.
But here, the Interest rates we are talking about is the rate at which a central bank or federal bank of any country lends the money to other banks. In USA, the central bank is Federal Reserve and in India, it is Reserve Bank of India.
Central Banks world over lends money to other Banks of their country. The Interest rate at which it is being given to the Banks really matters. If there is inflation, in order reduce the price rise, Central banks increase their lending rates in order to reduce the flow of money in to the system. This in turn reduce the price rise.
And in times of deflation ( prices decline steadily ), Central banks reduce the lending rates to inject money in to the system.

If interest rates are hiked, then the Banks will increase their lending rates and the Industry which is financed by Banks will get affected by the rising interest cost. Thus it affects the bottomline of the Company.
Since companies bottomlines are affected by rising Interest cost, their earnings will be affected which in turn affect the sentiments of the stock Market, which in turn affect the stock prices of the companies.

Is the Bear Market over Worldover?

January 2008 saw the start of a bloody decline in stock markets World over and it terminated the bull run in the stock markets that started on 2003. The decline continued till  october2008 in most of the Asian Markets and the decline terminated around february in US and European Markets.



People ranging from ordinary men to investors in the stock market panicked and the period saw many layoffs in all sectors of the Economy. Unemployment rose in US and world over. The severely affected country was USA.


Many Banks and Financial Institutions in USA went bankrupt mainly because of sub prime crisis which is due to the burst of real estate bubble and Stock Market decline. The tremors are felt heavily in European countries and it is felt mildly in Asian Economies. It was said at that time, that World was going to face the worst bear market.


Ever since that, Governments offered stimulus packages to boost their respective countries economies. The stock Market were recovered from the lows very quickly. Now, everybody saying that the bear market is over. The stimulus packages given by their governments boosted the economy and everything is normal today.


But My opinion is, even though Stock Markets have rallied for the past 9 months, the present rally seems to be temprory.


No bear market completes its term in just 9 months. So, the real and the worst bear market is yet to come. It may take another five or six years to complete. Hisotry will always repeat itself.


Be prepared for it.

Sectors for the Next Bull Markets

Sectors for the Next Bull Markets

World over each Bull Market will be lead by any particular sector or any particular set of Sectors of the Industry. The 1990s rally was lead by Old Economy Sectors like Cement, Steel, and Automobiles. The next Bear Market was also lead by the same sectors.

The 2000 rally was supported by ICE sectors. ‘ICE’ shortly denotes Information, Communication, and Enterntainment Sector. The Stock prices of Companies like Microsoft, Apple, Oracle, Adobe, Sun, IBM went to dizzy heights. In India, Infosys, Satyam, Wipro, Hcl Tech are the companies saw a massive bull run.

Zee tv, Himachl Futuristics, Global Tele systems were the stocks from Media and Telecom Sector that are in bull Run.

Globally, Telec om Multinational Companies like AT&T saw bull run in all European Stock Exchanges.

Like wise in the previous Bear Market, the same sectors which lead the bull rally, lead the next Bear Market.

The Bull Rally that started in 2003 Globally, is supported by Power, Infra, and Reality Sectors. Globally, the companies in this sector was in demand in all Stock Exchanges.  Like wise, the bear market in 2008 was also lead by these sectors.

So, which sector is going to lead the next bull rally. Technical studies reveal Pharma, FMCG, Financials will lead the next rally Globally in all Stock Markets.

Be prepared for that.