Home / Knowledge / News / Textiles / Market moves in right direction
Market moves in right direction
12
Jan '08
NY futures gave back some ground this week, as March lost 175 points to close at 66.96 cents, while December dropped 190 points to close at 74.56 cents.

The long awaited correction finally arrived and it was swift and steep, as March dropped nearly 300 points from yesterday's intra-day high of 69.65 cents. Earlier in the week, additional spec buying had extended the rally, which began on December 6, to nearly 700 points.

In the process open interest increased by over 50'000 contracts, as it measured a record 261'151 contracts or 26.1 mio bales this morning. But after the huge jump in open interest of over 10'000 contracts in Tuesday's session, the market seemed to be ready for a breather.

The market has been overbought by technical measures for quite a while and initially it may have been a void of additional buying that allowed this correction to unfold. However, when the market broke through the up-trend line this morning, selling pressure intensified and values caved in.

What may have added to the weakness over the last couple of days is the rebalancing of the two major commodity indexes, the S&P GSCI and the Dow-AIG. Every year, these two commodity baskets, which form the base for many of the commodity index funds that track them, rearrange the weightings of their individual commodities.

In the case of cotton, these adjustments amount to a miniscule increase in the S&P GSCI of about 0.02%, from 0.80 to 0.82%, while in the Dow-AIG cotton suffers a severe cutback of 0.48%, from 2.96 to 2.48%.

When we try to express that in terms of how many contracts will have to be bought and sold to account for this readjustment, we come up with about 800 contracts that have to be bought in the S&P GSCI, while it requires the selling of over 6'000 contracts in the case of the DOW-AIG.

Interestingly, the DOW-AIG readjusts its position during the monthly roll period between the 6th and 10th business day, which falls between the 9th and 15th of January. Therefore, it is quite possible that this rebalancing played a significant part in the selling we have seen over the last two sessions.


Must ReadView All

Courtesy: Pexels

Textiles | On 27th Apr 2018

AWEX EMI sets new all-time record; touches 1847ac per kg

In the week ending April 27, 2018, the Eastern Market Indicator (EMI) ...

Indian exporters lobby FIEO urges lifting of ban on LoUs

Textiles | On 27th Apr 2018

Indian exporters lobby FIEO urges lifting of ban on LoUs

India’s exporters lobby Federation of Indian Export Organisations...

US GSP extension restored on 22 Apr, refunds not automatic

Apparel/Garments | On 27th Apr 2018

US GSP extension restored on 22 Apr, refunds not automatic

The US generalized system of preferences (GSP) programme was restored ...

Interviews View All

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

C. Dhandayuthapani
Mag Solvics Pvt. Ltd

ITME 2016 exploited our full strength like never before

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Apurva Kothari

No Nasties was the first fashion brand in India to make 100 per cent...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Cigdem Akin
Cigdem Akin

She has carved a niche for herself as the national brand of Turkey. Her...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search