Thursday, 5 March 2015

A weak start likely for Indices

A weak start is likely for the Indices which will look at taking support around these levels ahead of a Holi-day tomorrow. Global cues have nothing to encourage a start in the green with the Dow falling to 0.58% and S&P 500 shedding 0.44%. Nasdaq was down 0.26%. US jobs data is due tomorrow and European Central Bank meeting later today will be in focus.   Asian markets are mixed with Japan's Nikkei 225 and China's Shanghai trading higher while Hong Kong's Hang Seng index is trading down.

A significant dip in inflationary pressures and moderation in core inflation and need to support economic growth prompted the move prompted RBI to cut repo rate by 25 bps to 7.5%. To an extent, the policy document sounds like it is moving from a restrained approach to a dynamic one. Whether the central bank proactively pushes growth in ensuing meetings or not remains to be seen now. For the indices, it was yet another swinging day, hitting a new peaks followed by a downslide. Profit booking at higher levels could have sparked some sell off.

Wednesday, 4 March 2015

A flat opening likely for Indices

A flat opening is likely for the Indices. The indices could slip into the red given subdued global cues. Eyes are on European Central Bank later this week as it announces additional details about quantitative easing. The Dow and S&P dropped half a percent while Nasdaq shed 0.56%. Asian markets are mixed with Japan's Nikkei and Hong Kong's Hang Seng trading lower while China's Shanghai is in the green.

The Insurance Bill was tabled in Lok Sabha, to replace the ordinance which was earlier promulgated to allow for higher foreign equity participation in Indian insurance companies. The Bill was first introduced in Rajya Sabha, way back in 2008, but has been stuck due to non-concurrence of all the political parties. To attract more capital from the government, public sector banks will have to ensure that they have strong balance sheets, RBI deputy governor R Gandhi said.

Tuesday, 3 March 2015

A flat opening likely for Indices

A flat start is likely for the Indices. Indices could swing in and out of positive zone today. With Nasdaq kissing the 5000 mark, the Nifty’s 9000 number is in focus. US indices gained with the Nasdaq closing at 5009, up 0.9%. These are levels last seen in the year 2000 when dotcom mania had gripped Wall Street. Dow rose 0.8% while S&P added 0.6%. Asian markets are mixed with Nikkei and Hang Seng in the green while China’s Shanghai is in the red.

The government is set to liberalise foreign direct investment norms for non-resident Indians as part of its efforts to boost capital flows in sectors such as defence and railways, says a report. This could prompt some action in these counters. Brent futures fell 5% on reports supplies could increase in case a nuclear deal lifts Iran's sanctions and boosts its oil exports. Auto stocks ended on a mixed note following the monthly sales data. Shares of oil marketing companies flared after oil firms hiked petrol and diesel prices by around Rs. 3 each. 

Almost 60% of Asian retail investors who have exited mutual funds do so because the funds have achieved their target returns. Slightly less than half exited due to poor fund performance, while two in five retail investors redeemed fund investments in anticipation of poor market conditions.

Monday, 2 March 2015

A gap-up opening is likely for Indices

A gap-up opening is likely with the Indices looking to scale new highs. Attention will be on Nifty attempting to hit the 9,000 mark. Fuel price hike will also have an impact on OMCs. Infrastructure Output figures and Fiscal Deficit numbers will also be eyed today. Global indices are lackluster with US indices closing lower on Friday. Dow fell half a percent while S&P ended flat. Nasdaq too dropped half a percent.  Asian indices are mixed with Japan’s Nikkei flat while Hong Kong’s Hang Seng gaining 0.4%. China’s Shanghai is also slightly lower.

Finance Minister Arun Jaitley delivered a practical budget that addresses crucial areas topping the government agenda. Foreign investors would be pleased with deferment of GAAR by 2 years, merging of FIIs and FDI limits, resolution of domicile issue, removal of MAT etc. There are several incentives to boost domestic savings and direct it towards financial instruments for productive use. More notably, there are steps to release money blocked in gold.

On the domestic front, the FM has indeed boosted corporate and individual sentiment with his resolve to move towards a 25% tax level in next four years and the additional deductions for individual tax payers for health cover premium payments, pension contribution and transport allowance. No budget can please everybody or leave no room for criticism. If one has to list disappointments, there are a few, such as failure to provide a convincing solution to capital needs of public sector banks or direct boost to private sector for new capex. 

In his Budget Speech in Lok Sabha, the Finance Minister said that the real GDP growth is expected to accelerate to 7.4%. CPI inflation is expected to remain close to 5% by the end of the year which will allow further easing of monetary policy. Jaitley said a Monetary Policy Framework Agreement has been concluded with the RBI to keep inflation below 6%. FM proposed rationalization of various tax exemptions and incentives to reduce tax disputes and improve tax administration. With a view to encouraging savings and promoting health care among individual tax payers, the FM proposed to increase the limit of reduction of health insurance premium from Rs 15,000 to Rs 25,000 and from Rs 20,000 to Rs 30,000 for senior citizens. 

The Finance Minister proposed to defer the applicability of the General Anti Avoidance Rule (GAAR) by two years. Investments made up to 31.03.2017 shall not be subjected to GAAR. Finance Minister also announced Rs 69,500 crore plan to sell stakes in government companies. Out of the total budgeted proceeds, Rs 41,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 28,500 crore is projected to come from strategic sale in both profit and loss-making companies, says report. The revised estimates pegged the disinvestment receipts from minority stake sale in PSUs at Rs 26,353 crore.

Petrol prices were hiked by Rs 3.18 per litre while diesel by Rs 3.09 per litre. This was the second increase in two weeks. In Delhi, diesel will cost Rs 3.09 more at Rs 49.71 a litre from Sunday, while the price of petrol will increased Rs 3.18 per litre to Rs 60.49.

Shares of cigarettes manufacturing companies have dealt a severe blow following a steep hike in excise proposed in the Budget. According to the Union Budget 2015-16 proposals, the Finance minister has proposed to hike excise duty on cigarettes to 25 per cent for under 65 mm category, and 15 per cent for other categories. The proposed merger of FMC with SEBI to create a unified markets regulator has sounded a death knell for the illicit 'dabba trading', estimated to have a turnover of up to Rs 1 lakh crore per day, says a report.

Saturday, 28 February 2015

A higher opening likely for Indices

A higher opening is likely for the Indices. With most global markets shut, the indices have enough reason to decide their own direction. Of course a lot will depend on what the budget has in store and how it is interpreted by the market.  US indices ended lower. US economy grew much slower than expected in the fourth quarter. The Dow fell 0.45% while the S&P 500 ended flat. Nasdaq shed one-half of a percent.

Prime Minister Narendra Modi-led government’s target of achieving a 4.1% fiscal deficit target is achievable, said Economic Survey for the year 2014-2015.  The Economic Survey 2014-15 presented by the Finance Minister Arun Jaitley to the Parliament indicates that a clear political mandate for reform and a benign external environment now is expected to propel India on to a double digit trajectory. 
It states that Indian economy appears to have now gone past the economic slowdown, persistent inflation, elevated fiscal deficit, slackening domestic demand, external account imbalances and oscillating value of the rupee.

According to the Economic Survey 2014-15, the Average Wholesale Price Index (WPI) (base year 2004-05 = 100) inflation declined to 3.4% in 2014-15 (April-December) as compared to an average of 6% during 2013-14. During the first quarter of 2014-15, WPI headline inflation stood at 5.8% as mainly food and fuel prices were high.

The Economic Survey 2014-15 says the IT and ITeS sector including Business Process Management (BPM), continues to be one of the largest employers in the country, directly employing nearly 35 lakh people. NASSCOM estimates the revenue of the IT-BPM industry at US$119 billion grew by 12% in 2014-15 with export market alone making up almost $100 billion. The year witnessed hyper-growth in the technology start-up and software product landscape, India ranking as the fourth largest start-up hub in the world with over 3,100 start-ups in the country. Software products and services revenues for 2015-16 is projected to grow at 12-14%.

Prime Minister Narendra Modi addressed the Lok Sabha saying that the government is trying to find out solutions to problems.existing for years Corruption remains an issue of concern,  he said stressing that the real issue is about development and not about names of schemes.

Friday, 27 February 2015

A higher opening likely for Indices

A higher opening is likely for the Indices.The unwinding of positions and rollover in the F&O expiry brought in the usual volatility on Thursday. US crude oil futures are down over 5% owing to rising inventories in the United States. The Dow Jones and S&P 500 fell marginally while the Nasdaq clocked some gains. Japan's Nikkei 225 and Hong Kong's Hang Seng are flat while China's Shanghai index has inched up higher marginally. FII numbers have been encouraging for thursday.

The Railway budget is out of the way and most announcements seem to be in line with a commitment to reforms. Freight rates have been increased in some cases while passenger fares are unchanged. Allocation for upkeep of track and bridges and traffic facility works are among the specifics seen as workable and positive. 

The Economic Survey will be in focus today and investors may prefer to stay light ahead of the budget announcement tomorrow. Finance Minister Arun Jaitley may surprise investors with a fiscal deficit achievement of 3.9-4.0% versus the targeted 4.1% for the year. The Rs 220 billion money-raising from Coal India’s Offer-for-Sale and lower crude oil price would largely help the Government beat the target. FM will most likely adhere to 3% fiscal deficit target by 2016-17. 

Suresh Prabhu  made changes in freight rates without affecting passenger rates. The Budget also revised the commodity classification and distance slabs for carriage of commodities that can raise freight rates upto 10% in some of the items. Railways will increase its daily passenger carrying capacity from 21 million to 30 million. Presenting the Railway Budget 2015-16 in Parliament, Suresh Prabhu said, Railways will also increase track length by 20% from 1,14,000 km to 1,38,000 km, and grow its annual freight carrying capacity from 1 billion to 1.5 billion tonnes. Railway Minister Suresh Prabhu who assured Parliament that these would be announced in the ongoing session itself.

Thursday, 26 February 2015

A flat opening is likely for indices

A flat opening is likely for the Indices as Feb series expires today. Global markets are mixed, U.S. stocks ended Wednesday's choppy session on a flat note. However, the Dow Jones eked out marginal gains to shut shop at fresh record. The S&P 500 SPX and Nasdaq Composite closed slightly lower breaking its ten-day winning streak. The Asian markets are trading mixed the Nikkei index in Japan returned to its winning ways while the Hang Seng index in Hong Kong was trading lower. Brent crude oil rose above $59 a barrel. Saudi Arabia's oil minister was quoted as saying that oil demand was growing.

Interestingly, while the Nifty has seen high rolls the BankNifty rolls are below average as of Wednesday indicating that banking stocks could be weaker than the previous expiry. The movement for the day will hinge earlier on the Railway Budget. People don’t really expect the railway minister to hike passenger fares and freight rates besides some possible changes in Tatkal fares. Railway related stocks ended on a mixed note ahead of the Railway Budget. Some stocks which have galloped in recent days saw profit booking and some merciless selling too. 

Finance Minister Arun Jaitley said that the top priority for the government is to meet its fiscal deficit despite the urgent need for investments. During a meeting at the Parliamentary Consultative Committee, Jaitley said that the global environment is ripe for India as an increasing number of investors are showing interest in the market. He added that the investments in infrastructure, manufacturing, and agriculture sector will take precedence in Budget over other segments. Jaitley said that the economic indicators are moving in the right direction, and the economic situation overall is convincing. He further said that the growth rate in current fiscal based on the old method is better than the previous year. He said that the economy expanded at 4.7% in 2013-14 fiscal as per old methodology while it grew 6.9% as per the new system.

​Investors will not be able to buy and redeem mutual fund units on February 28 even as the stock markets remain open​, says a report.