The Walking Dead

How did equities as an investment look now after being pronounced dead about 5 years ago? Remember 2008, when everybody and his uncle was shit scared and trying to save his ass from getting fired in latest downsizing. I don’t want to remember that either. Everyday you lose friends, colleagues, batchmates to credit crisis. That was when I started giving blogging a serious thought. You can read my 2008 posts here. I wrote only three.

Lot of people denounced equities back then. Lot of my friends changed career lines. Not me. I stayed. To write this post. Not that I have become a portfolio manager of some big stud firm or have decided to retire from this business after making my millions during this crisis. Nope. My objectives are still far from being achieved. Though, I did made some money. But I stayed to present you with this graphic (all NSE data) which speaks volumes about the performance of equity markets since 2007 with special mention to 5 years CAGR performance.

Let me know what are your thoughts on equities as an investment.

Weekly Market Commentary - Dec 23 - Dec 27, 2013

2013 is coming to close. Markets registered a gain on last week of this year as it did in the first week of this year. Highlights of this year were all the noise around QE tapering from US Fed that led to a roller coaster ride for our currency and stock markets. Although, it all turned out to be a whimper but it did give a wakeup call to Indian govt. to get its act together. Add to all this mayhem the cancellation of POSCO and ArcellorMittal plans to setup plants in India, scams, inflation, gang rapes, policy paralysis, rating downgrade warnings and uncertainty around elections. So, there was the ground, seven layers of shit and then us.

Nonetheless, our markets recovered their old glory as Sensex made new highs. Market rejoiced as veterans returned to take care of their broken legacies; stalwarts were appointed to guide our way through fiscal mess, save rupee and general public from scourges of inflation; and anti-corruption wave made way for more business friendly governments and ushered into a new era as a one year old party made people realize that their voices are not unheard.

As many of the above problems have remained unsolved, hope has emerged as country prepares to elect its new leadership in 2014. Let us hope for an even better and interesting 2014.

I wish a very happy and prosperous new year to my readers.

Sensex gained 0.5%; Nifty gained 0.6% while CNX Midcap was up by 2.5% this week.

Monday – Sensex up by 0.1%, Nifty up by 0.2%, Midcap up by 1.1%
Upward movement during the first half of the trading day was capped by late selling seen in Infosys, which saw exit of another key management personnel, HDFC, which saw some profit booking after RBI said inflation fighting is still their topmost priority. Market momentum stayed bullish as global indices firmed up though some volatility generally increases near F&O expiry date.

Tuesday - Sensex down by 0.3%, Nifty down by 0.3%, Midcap up by 0.5%
Markets remained choppy as investors stayed cautious ahead of F&O expiry on Dec 26. Global markets also remained range-bound due to light trading activity ahead of holiday season.

Wednesday – Markets closed on occasion of Christmas

Thursday – Sensex up by 0.2%, Nifty up by 0.2%, Midcap up by 0.2%
Trading activity was mute on the F&O expiry day. Axis Bank rallied surged after the Cabinet Committee on Economic Affairs (CCEA) approved proposal to increase foreign investment in the bank from 49% to 62%.

Friday – Sensex up by 0.6%, Nifty up by 0.6%, Midcap up by 0.7%
Market closed the week higher led by gains in export-oriented sectors such as IT and Pharma as US data showed improved recovery in employment situation. Banks and FMCG also gained as street expects inflation data to be lower in January and RBI to maintain status quo on rates.

Weekly Market Commentary - Dec 16 - Dec 20, 2013

Quite a week for Indian markets. With Fed’s tapering decision out of the way and uncertainty related to Indian govt’s stand on KG D6 gas price revision cleared, investors and business got another major sentiment boost from RBI governor who decided not to raise rates even in the midst of rising inflation. Therefore, what resulted is Sensex regaining 21,000 level while focus now shifted to food inflation data, which, if strengthened, may warrant a rate hike from RBI.

Sensex gained 1.8%; Nifty gained 1.7% while CNX Midcap was up by 3.1% this week.

Monday – Sensex down by 0.3%, Nifty down by 0.2%, Midcap up by 0.4%
Sensex failed to gain ground as impending rate hike concerns, post high inflation numbers, have kept the street nervous. Street is widely expecting a repo rate hike of 25bps to 8.00% in Dec 18 policy review. Recent govt data shows that costly vegetables, particularly potato and onion has pushed the November WPI to 7.52% from 7% previous month while CPI has jumped to 11.24% warranting inflation controlling measures from central bank.

Tuesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap down by 0.1%
Markets traded in the narrow range as investors stayed cautious ahead of RBI policy review meet on Wednesday.

Wednesday – Sensex up by 1.2%, Nifty up by 1.3%, Midcap up by 1.5%
RBI sprung a surprise as it decided to maintain the status quo and left the rates unchanged. Investors’ sentiments turned bullish as RBI governor Raghuram Rajan indicated lowering of inflation in near term due to falling vegetable prices but promised to act if inflation did not subside as expected.

Thursday – Sensex down by 0.7%, Nifty down by 0.8%, Midcap down by 0.4%
There was some selloff as Fed announced $10bn of tapering every month. Neither the selloff nor the tapering decision came as a surprise. Federal Open Market Committee (FOMC) expects that with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline.

Friday – Sensex up by 1.8%, Nifty up by 1.7%, Midcap up by 1.7%
Markets went up as Fed’s QE tapering decision is finally out of its way and as expected did not have major impact on either stocks or currency. Sensex got a major boost as govt. finally cleared Reliance Industries’ demand of higher gas prices while asking them to deposit a guarantee equivalent to any incremental revenue. With this decision, govt has cleared lot of uncertainties in the oil and gas industry and made easier for foreign companies to invest in India.