Sunday 26 May 2013

Weekly Outlook

Nifty is showing inherent weakness.
A recovery to the levels of 6075 -- 6100 may be used to go short.

Hope the data points that are to be released in the coming week
do not disappoint the markets.

Thursday 23 May 2013

Market Synopsis

In the US, the Federal Bank seems to be indecisive at reducing its assets buying
program until it thinks that it is convinced that the US recovery is sustainable and the
jobless rate comes down to 'comfortable' levels.    Therefore, the QE3 will continue
for some more time.    Liquidity conditions will remain easy.

In China, the economic data (PMI) has disappointed the markets.    Nikkei was totally
rattled today taking the brunt of weak Chinese data and strengthening US dollar.

Locally, the strength in USD index has further aggravated the already prevailing
pressure on the INR causing the rupee to depreciate to Rs56 per USD.    The markets
reacted sharply to global developments and pressure on the INR.   Now, we have clearly
lost the upward momentum in Nifty that was existing until last week.    The spike in
the volatility index also suggests the same.

Bulls beware.     While we have another week for the month of May to get over,
the adage - 'sell off in May and go home' may as well come true this time.

Friday 17 May 2013

Liquidity Induced Rallies

Central Banks, the world over, are on a monetary easing mode to spur growth for
their respective economies.    Barring the eurozone, these measures seem to be
yielding results in varying proportions.    US is showing signs of recovery.    In Japan,
Abenomics seems to be working for its economy.    At least, the latest Q1 GDP
number seems to suggest so.

While these monetary easing measures may have spurred growth, the other aspect
of these measures is the conspicuous stock market rallies world over.    US stock markets,
the Nikkei, DAX, Nifty, etc., are trading at their record highs.    In the context of Nifty,
market is rallying on the back of strong FII inflows defying macro economic fundamentals.

The IMF in its latest report on emerging economies cautioned that "financial imbalances
and rising asset prices, fuelled by strong credit growth and easy financing conditions
are building in several Asian economies".    In the event of severe global slowdown,
capital flow reversals and falling external demand would exert a powerful drag on Asia's
most open economies.

Sunday 12 May 2013

Weekly Outlook

Nifty is inching upwards on low volumes.    It seems there is no conviction
in the ongoing uptrend.    On the technical chart,  market is trading in an
overbought zone.

I will not be surprised if market takes a breather.    If the upcoming quarterly
numbers do not meet street's expectations or the inflation numbers disappoint
then, a correction cannot be ruled out.

Thursday 9 May 2013

Global Economic Parameters

Read some useful comparatives.

Country                            Investments                Gross National Savings
                                        (% of GDP)                       (% of GDP)

China                                    46.875                              49.473
India                                     34.915                              29.802
Japan                                    20.581                              21.57
France                                  19.901                              17.569
Euro Area                             18.285                              20.20
USA                                     16.16                               13.131
  

Sunday 5 May 2013

Weekly Outlook

With Reserve Bank of India meet on May 3rd turning out to be a non-event,
market for the coming week is likely to remain sideways.

Upcoming quarterly results, factory output data and global cues will determine
the trend of the Nifty in the coming sessions.

Wednesday 1 May 2013

Market Synopsis

Yesterday, India slashed the rate of tax levied on the interest that foreign investors earn
on their investments in local bonds to 5% from 20%.    The new rate will be effective
from June 1, 2013 to May 31, 2015 to FIIs and individual investors in govt. securites
and rupee-denominated government and corporate bonds.    Earlier, the 5% tax rate on
foreign investments was applicable to long term infrastructure bonds.    But, with the
latest decision by the govt., the lower rate will be extended to all categories of govt. and
corporate bonds.    Market is seeing this measure as another step taken by the govt. at
addressing the Current Account Deficit.
 
INR closed at 53.80 versus the USD on Tuesday after appreciating 43 paise over Monday's close.   
Market has responded positively to the govt.'s measure.

Yesterday, Unilever announced its decision to go for a strategic stake in Hindustan
Unilever Limited from 52.5% to 75%.    The market received the news cheerfully.
The stock price shot up by 17% yesterday.

All these are adding up to the already prevailing positive sentiment in the market.