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.
Sunday, September 29, 2013
Monday, September 23, 2013
The Kinda Sutra
Almost everyone has a funny story about where they used to think babies came from. Sundance Documentary short, "The Kinda Sutra," is a look at people's youthful misconceptions about conception. Thought provoking stuff. And in case you're still not sure how babies are made, the kids at the end of the film break it down.
Hat Tip: Alpha Ideas
Hat Tip: Alpha Ideas
Sunday, September 22, 2013
Weekly Market Commentary - Sept 16 - Sept 20, 2013
India, since Fed announced its tapering plans, got its act together and has done quite well in pushing some key reforms in parliament. RBI on its part took some controversial, but crucial steps to stem the decline in rupee that followed the Fed announcement. Now, when Fed has put a halt on its tapering plans, we all can just keep our fingers crossed and hope that Indian govt. does not become complacent and let go off this lifeline. We hope that reform momentum continues and we get our house in order before the next shitstorm hit us.
Sensex gained 2.7%, Nifty gained 2.8% and CNX Midcap was up by 1.3% this week.
Monday – Sensex flat at 0.0%, Nifty down by 0.2%, Midcap down by 0.5%
Investors were disappointed on Monday as RBI released its WPI inflation figures. RBI while formulating its policies uses WPI data along with CPI as an anchor. According to data released on Friday, retail inflation dropped in August. However unlike retail inflation, WPI rose to six month high to 6.1% in August (July – 5.79%). Market is anticipating that upturn in WPI will make it difficult for newly appointed RBI governor to cut rates.
Tuesday - Sensex up by 0.3%, Nifty up by 0.2%, Midcap down by 0.3%
Investors remain cautious ahead of two key events this week. On Sept 18, Fed will take decision on whether to continue to taper and by how much. Street is expecting tapering of $5-$10 billion every month. Anything above or below that range can cause sharp movements in the indices. Raghuram Rajan has decided to unveil its maiden policy on Sept 20 after getting a handle on Fed announcements. These two events together may hold key to future movements of Indian indices.
Wednesday - Sensex up by 0.8%, Nifty up by 0.8%, Midcap up by 0.5%
Expectations from Fed meeting continue to weigh on the markets. Markets closed higher as FIIs continue to build positions in the Indian markets.
Thursday – Sensex up by 3.4%, Nifty up by 3.7%, Midcap up by 2.9%
Fed surprised the market with announcement of deferring its tapering plans and instead decided to continue with its stimulus amid weak economic growth in US. I already highlighted in June that how the timing of tapering is suspicious as US economy, and with it global economy, continues to struggle. Markets celebrated the decision as day of reckoning for many of emerging economies like India, has deferred to some unknown date in the future.
Friday – Sensex down by 1.9%, Nifty down by 1.7%, Midcap down by 1.3%
In his maiden policy, Raghuram Rajan stumped the investors with a repo rate hike. Repo rate is now 7.25%. Rajan made it clear that fighting the inflation and exchange rate management is his top priority, so there is a need of liquidity tightening. RBI, in a bid to lower the cost of capital of banks, reduced the MSF by 75 bps from 10.25% to 9.5% and slashed the minimum daily CRR requirement from 99% to 95%.
Sensex gained 2.7%, Nifty gained 2.8% and CNX Midcap was up by 1.3% this week.
Monday – Sensex flat at 0.0%, Nifty down by 0.2%, Midcap down by 0.5%
Investors were disappointed on Monday as RBI released its WPI inflation figures. RBI while formulating its policies uses WPI data along with CPI as an anchor. According to data released on Friday, retail inflation dropped in August. However unlike retail inflation, WPI rose to six month high to 6.1% in August (July – 5.79%). Market is anticipating that upturn in WPI will make it difficult for newly appointed RBI governor to cut rates.
Tuesday - Sensex up by 0.3%, Nifty up by 0.2%, Midcap down by 0.3%
Investors remain cautious ahead of two key events this week. On Sept 18, Fed will take decision on whether to continue to taper and by how much. Street is expecting tapering of $5-$10 billion every month. Anything above or below that range can cause sharp movements in the indices. Raghuram Rajan has decided to unveil its maiden policy on Sept 20 after getting a handle on Fed announcements. These two events together may hold key to future movements of Indian indices.
Wednesday - Sensex up by 0.8%, Nifty up by 0.8%, Midcap up by 0.5%
Expectations from Fed meeting continue to weigh on the markets. Markets closed higher as FIIs continue to build positions in the Indian markets.
Thursday – Sensex up by 3.4%, Nifty up by 3.7%, Midcap up by 2.9%
Fed surprised the market with announcement of deferring its tapering plans and instead decided to continue with its stimulus amid weak economic growth in US. I already highlighted in June that how the timing of tapering is suspicious as US economy, and with it global economy, continues to struggle. Markets celebrated the decision as day of reckoning for many of emerging economies like India, has deferred to some unknown date in the future.
Friday – Sensex down by 1.9%, Nifty down by 1.7%, Midcap down by 1.3%
In his maiden policy, Raghuram Rajan stumped the investors with a repo rate hike. Repo rate is now 7.25%. Rajan made it clear that fighting the inflation and exchange rate management is his top priority, so there is a need of liquidity tightening. RBI, in a bid to lower the cost of capital of banks, reduced the MSF by 75 bps from 10.25% to 9.5% and slashed the minimum daily CRR requirement from 99% to 95%.
Sunday, September 15, 2013
Weekly Market Commentary - Sept 9 - Sept 13, 2013
Receding fears of war with Syria led to cooling of oil prices that in turn led to strengthening of rupee against the global currencies. Rupee also gained strength as FIIs continued to buy Indian shares after newly appointed RBI governor Raghuram Rajan charted out plans to get the country out of its current mess. Sensex gained 2.4%, Nifty gained 3.0% and CNX Midcap was up by 3.4% this week.
Monday – Markets closed on occasion of Ganesh Chaturthi
Tuesday - Sensex up by 3.8%, Nifty up by 3.8%, Midcap up by 1.8%
Markets remained buoyant from last week sentiment boost they received from Raghuram Rajan appointment and his maiden speech as RBI governor. Global markets also took respite from the news that Russia has persuaded Syria to put its chemical weapons under international inspection, which worked to shelve the fears of US strike on Syria and led to global rally in stocks.
Telecoms were the major gainers today as TRAI reduced the base price by 37%, from Rs. 2,379cr to Rs. 1,496cr per MHz of pan India spectrum. TRAI also recommended that a flat spectrum usage (SUC) of 3% of gross revenue from 2-8% earlier. Telecom companies are expected to save around 60-80,000cr over a 20-year period.
Wednesday - Sensex up by 0.0%, Nifty up by 0.3%, Midcap up by 1.6%
Markets opened lower as some investors rushed to book profits after previous day’s rally, which was biggest gain in Sensex in four years. Market recouped its losses as day progressed as tension over Syria eased leading to cooling of oil price momentum. Also, consistent recovery in rupee is helping boost the Indian investor sentiment.
Thursday – Sensex down by 1.1%, Nifty down by 1.1%, Midcap down by 0.7%
Investors turned a little cautious and booked profits ahead of IIP and CPI inflation data release expected on Friday.
Friday – Sensex down by 0.2%, Nifty down by 0.0%, Midcap up by 0.7%
Stocks tumbled after PM’s economic panel raised its doubt over Govt. achieving its fiscal deficit target of 4.8% of GDP in current year. Investors also continued to cut positions ahead of US Fed meeting and RBI first meeting under Rajan next week. Market is keenly awaiting Fed’s decision on tapering and RBI’s response to it.
Bulls did get some respite in form of better-than-expected July 2013 IIP data (+2.6% yoy) and fall in retail inflation to 9.52% in August from 9.64% in July. August WPI data, an anchor used by RBI to decide on its policy decisions, will release on Monday.
Monday – Markets closed on occasion of Ganesh Chaturthi
Tuesday - Sensex up by 3.8%, Nifty up by 3.8%, Midcap up by 1.8%
Markets remained buoyant from last week sentiment boost they received from Raghuram Rajan appointment and his maiden speech as RBI governor. Global markets also took respite from the news that Russia has persuaded Syria to put its chemical weapons under international inspection, which worked to shelve the fears of US strike on Syria and led to global rally in stocks.
Telecoms were the major gainers today as TRAI reduced the base price by 37%, from Rs. 2,379cr to Rs. 1,496cr per MHz of pan India spectrum. TRAI also recommended that a flat spectrum usage (SUC) of 3% of gross revenue from 2-8% earlier. Telecom companies are expected to save around 60-80,000cr over a 20-year period.
Wednesday - Sensex up by 0.0%, Nifty up by 0.3%, Midcap up by 1.6%
Markets opened lower as some investors rushed to book profits after previous day’s rally, which was biggest gain in Sensex in four years. Market recouped its losses as day progressed as tension over Syria eased leading to cooling of oil price momentum. Also, consistent recovery in rupee is helping boost the Indian investor sentiment.
Thursday – Sensex down by 1.1%, Nifty down by 1.1%, Midcap down by 0.7%
Investors turned a little cautious and booked profits ahead of IIP and CPI inflation data release expected on Friday.
Friday – Sensex down by 0.2%, Nifty down by 0.0%, Midcap up by 0.7%
Stocks tumbled after PM’s economic panel raised its doubt over Govt. achieving its fiscal deficit target of 4.8% of GDP in current year. Investors also continued to cut positions ahead of US Fed meeting and RBI first meeting under Rajan next week. Market is keenly awaiting Fed’s decision on tapering and RBI’s response to it.
Bulls did get some respite in form of better-than-expected July 2013 IIP data (+2.6% yoy) and fall in retail inflation to 9.52% in August from 9.64% in July. August WPI data, an anchor used by RBI to decide on its policy decisions, will release on Monday.
Subscribe to:
Posts (Atom)