Elections are over. New govt is in place. The country is in midst of (sort of) growth crisis. Time has come for govt to roll up its sleeve.
Asia’s third largest economy grew 4.7% in FY14 vs. estimated 4.9% - second quarter of sub 5% growth. It is estimated that projects worth $105.1bn were shelved last year due to bureaucratic gridlock - highest in the past 18 years. Stressed loans in India amounted to $100bn or about 10% of all loans when debt-equity ratio of Indian firms has hit a two-decade high of 97.9%, according to Nomura.
Add to the mix, slowing global economy that is hemming in the country's exports growth and prospects of bleak monsoon, which might fire up the inflation fury. All these would lead to central bank staying hawkish on interest rates.
Sensex ended this week down by 1.9% while Nifty was down by 1.9% and Midcap down by 3.0%
Monday - Sensex up by 0.1%, Nifty down by 0.1%, Midcap down by 2.0%
Investors booked profits as BSE Sensex and CNX Nifty, two key benchmark indices loses steam. Midcaps declined by 2% after gaining more than 10% previous week. Recovery hopes from Modi govt have kept markets at elevated levels in recent weeks. Sun Pharma and Ranbaxy gained after court lifted a temporary stay on their merger.
Tuesday - Sensex down by 0.7%, Nifty down by 0.6%, Midcap down by 1.0%
Markets continue to tumble as investors continued to book some profits and turned cautious as they wait for new policies to be announced and implemented from PMO. Newly appointed finance minister Arun Jaitley assured investors of stable policy environment.
Wednesday - Sensex flat, Nifty up by 0.2%, Midcap up by 0.6%
Sensex ended the day flat while Nifty went up slightly as some value buying occurred on bourses after recent correction. Shipping corp surged 14% after company reported first net profit after Sept 2012 quarter as bulk shipping and liner businesses improved. ICRA also jumped 18% after Moody’s raised offer price to Rs. 2,400/share from Rs. 2, 000/share.
Thursday - Sensex down by 1.3%, Nifty down by 1.3%, Midcap down by 0.9%
Sensex and Nifty posted their biggest decline in nearly four months on the day of derivative expiry. This goes on to indicate that Modi euphoria might be showing sign of ebbing and investors will focus on actual deliverance now. Losses in blue chips were led by Infosys, which fell by 8% after it saw exit of another top management official from the company.
Friday - Sensex down by 0.1%, Nifty down by 0.1%, Midcap up by 0.3%
Investors continued to stay low as election rally loses momentum. Sensex and Nifty ended the week in red marking the first weekly fall over last one month.
Sunday, June 1, 2014
Sunday, October 6, 2013
Weekly Market Commentary - Sept 30 - Oct 4, 2013
Indian markets gained this week primarily due to US shutdown, which inadvertently threw FIIs dollars in its direction. Nothing much has changed in Indian fundamentals though: CAD is still high; cost of funds has not gone down; consumer and business sentiment as reflected by weak PMI data. Even then, market is trading near its highs; is expensive and is very volatile. Though I continue to seek out the reasons to explain these anomalies, and I focus on most important ones, the economy and markets have too many moving parts. Every now and then, in order to explain the movements, I give in to recency effect and attentional bias.
Recency effect is nothing but one’s inclination to explain the process/event occurred, by whatever fresh news/story/event comes to mind. For e.g. markets went up as new RBI governor sworn in.
Attentional bias, on the other hand, is using your current subject under study: one you are most closely paying attention to, to explain every event occurring. For e.g. US shutdown is leading to global market rally as dollar investors have nowhere to go.
However, both examples used above may explain the market movements or state of the economy to some extent but the point is they are not the only ones.
Sensex gained 1.0%, Nifty gained 1.3% and CNX Midcap was up by 1.5% this week.
Monday – Sensex down by 1.8%, Nifty down by 1.7%, Midcap down by 0.8%
Indian markets were under pressure ahead of current account data release expected later in the day. An ET poll is estimating CAD to average $23 billion for Apr-Jun quarter vs. $18.1 billion a quarter earlier. Investors are worried that bad CAD data may force RBI to intervene in the market again and may escalate the cost of doing business in the near term.
Tuesday - Sensex up by 0.7%, Nifty up by 0.8%, Midcap up by 0.6%
Markets went up as RBI promised to infuse liquidity into the system via Rs. 10,000 crores purchase of government securities. Also, CAD figures released previous day came out to be little lower than what market participants were expecting. Gold and oil imports pushed 1Q14 CAD to $21.8 billion i.e. 4.9% of GDP. Indian govt plans to reduce the current account deficit to 3.7% of the GDP in FY14 to meet its $70 billion target.
Wednesday – Markets closed on occasion of Gandhi Jayanti
Thursday – Sensex up by 2.0%, Nifty up by 2.2%, Midcap up by 1.6%
Indian markets rose, as they became the target of FIIs dollars as current political crisis in United States has led to a shutdown of non-essential govt functionaries. Investors are worried that shutdown may prolong and will jeopardize any recovery of US economy.
Friday – Sensex up by 0.1%, Nifty flat, Midcap up by 0.2%
Markets ended flat as US dollars continued to flow in leading to increase in the value of Indian currency. The gain was capped as investors were disappointed by weak HSBC PMI data, which fell to 46.1 vs. 47.6 in August indicating contraction in private economy. Realty, auto and consumers gained as govt. decided to infuse funds into PSU banks to help them offer cheaper loans to public and industry.
Recency effect is nothing but one’s inclination to explain the process/event occurred, by whatever fresh news/story/event comes to mind. For e.g. markets went up as new RBI governor sworn in.
Attentional bias, on the other hand, is using your current subject under study: one you are most closely paying attention to, to explain every event occurring. For e.g. US shutdown is leading to global market rally as dollar investors have nowhere to go.
However, both examples used above may explain the market movements or state of the economy to some extent but the point is they are not the only ones.
Sensex gained 1.0%, Nifty gained 1.3% and CNX Midcap was up by 1.5% this week.
Monday – Sensex down by 1.8%, Nifty down by 1.7%, Midcap down by 0.8%
Indian markets were under pressure ahead of current account data release expected later in the day. An ET poll is estimating CAD to average $23 billion for Apr-Jun quarter vs. $18.1 billion a quarter earlier. Investors are worried that bad CAD data may force RBI to intervene in the market again and may escalate the cost of doing business in the near term.
Tuesday - Sensex up by 0.7%, Nifty up by 0.8%, Midcap up by 0.6%
Markets went up as RBI promised to infuse liquidity into the system via Rs. 10,000 crores purchase of government securities. Also, CAD figures released previous day came out to be little lower than what market participants were expecting. Gold and oil imports pushed 1Q14 CAD to $21.8 billion i.e. 4.9% of GDP. Indian govt plans to reduce the current account deficit to 3.7% of the GDP in FY14 to meet its $70 billion target.
Wednesday – Markets closed on occasion of Gandhi Jayanti
Thursday – Sensex up by 2.0%, Nifty up by 2.2%, Midcap up by 1.6%
Indian markets rose, as they became the target of FIIs dollars as current political crisis in United States has led to a shutdown of non-essential govt functionaries. Investors are worried that shutdown may prolong and will jeopardize any recovery of US economy.
Friday – Sensex up by 0.1%, Nifty flat, Midcap up by 0.2%
Markets ended flat as US dollars continued to flow in leading to increase in the value of Indian currency. The gain was capped as investors were disappointed by weak HSBC PMI data, which fell to 46.1 vs. 47.6 in August indicating contraction in private economy. Realty, auto and consumers gained as govt. decided to infuse funds into PSU banks to help them offer cheaper loans to public and industry.
Sunday, September 29, 2013
Weekly Market Commentary - Sept 23 - Sept 27, 2013
Overall, trades seeking to play the Fed-RBI announcement continued to unwind this week and took markets down with them. As second quarter results are upon us and street is not too excited with business environment and expects the results to be boring, indices are failing to find new catalyst to hold their ground. Sensex lost 2.6%, Nifty lost 3.0% and CNX Midcap was down by 0.5% this week.
Monday – Sensex down by 1.8%, Nifty down by 2.0%, Midcap down by 1.0%
Markets crumbled as investors’ sky-high expectations from the newly appointed RBI governor meets the realities on the ground. As Raghuram Rajan went on making inflation fighting his topmost priority and tightened liquidity, rate sensitives stocks such as banks took a heavy beating.
Tuesday - Sensex up by 0.1%, Nifty up by 0.0%, Midcap up by 0.2%
Banks continued to see heavy selling as Moody cut the SBI’s local currency and senior unsecured debt rating to lowest investment grade to Baa3 while changing the financial strength outlook to negative. Moody blamed the current weak financial position of bank’s promoter, Indian government as the reason for decline in asset quality, profitability and capital of public sector banks such as SBI.
Wednesday - Sensex down by 0.3%, Nifty down by 0.3%, Midcap up by 0.4%
Investors continue to square off the trades set up in the wake of Fed-RBI meetings previous week, ahead of derivative expiry on Thursday. Financial Technologies stock plunged as its auditor Deloitte Haskins bailed out on the firm and withdrew their audit report after claiming that firm’s financial statements are not reliable.
Thursday – Sensex up by 0.2%, Nifty up by 0.1%, Midcap down by 0.1%
Markets continued to stay volatile as investors unwind their positions on F&O expiry day but ended up little higher as RBI tried to give the market a reprieve by announcing a possibility of conducting OMO to ensure sufficient liquidity in the system.
Friday – Sensex down by 0.8%, Nifty down by 0.8%, Midcap flat
October F&O series started on a mute note with markets now turning to corporate earnings announcements expected in October to be low to modest, at best. Banks stayed under pressure as Raghuram went on questioning the strategy of central bankers around the world to keep the interest rates low to stimulate growth.
Monday – Sensex down by 1.8%, Nifty down by 2.0%, Midcap down by 1.0%
Markets crumbled as investors’ sky-high expectations from the newly appointed RBI governor meets the realities on the ground. As Raghuram Rajan went on making inflation fighting his topmost priority and tightened liquidity, rate sensitives stocks such as banks took a heavy beating.
Tuesday - Sensex up by 0.1%, Nifty up by 0.0%, Midcap up by 0.2%
Banks continued to see heavy selling as Moody cut the SBI’s local currency and senior unsecured debt rating to lowest investment grade to Baa3 while changing the financial strength outlook to negative. Moody blamed the current weak financial position of bank’s promoter, Indian government as the reason for decline in asset quality, profitability and capital of public sector banks such as SBI.
Wednesday - Sensex down by 0.3%, Nifty down by 0.3%, Midcap up by 0.4%
Investors continue to square off the trades set up in the wake of Fed-RBI meetings previous week, ahead of derivative expiry on Thursday. Financial Technologies stock plunged as its auditor Deloitte Haskins bailed out on the firm and withdrew their audit report after claiming that firm’s financial statements are not reliable.
Thursday – Sensex up by 0.2%, Nifty up by 0.1%, Midcap down by 0.1%
Markets continued to stay volatile as investors unwind their positions on F&O expiry day but ended up little higher as RBI tried to give the market a reprieve by announcing a possibility of conducting OMO to ensure sufficient liquidity in the system.
Friday – Sensex down by 0.8%, Nifty down by 0.8%, Midcap flat
October F&O series started on a mute note with markets now turning to corporate earnings announcements expected in October to be low to modest, at best. Banks stayed under pressure as Raghuram went on questioning the strategy of central bankers around the world to keep the interest rates low to stimulate growth.
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