MARKET MAY EDGE HIGHER WITH POSITIVE CUES
Better than expected inflation numbers and in-line Q1 GDP growth helped the bulls to take charge and the Indian equities managed to close with modest gains in a volatile week. Frontline indices reacted positively to fall in inflation and witnessed sharp run up despite slow down in Q1 GDP growth. Rate sensitives, infrastructure, oil, metal and technology stocks led the rally. Midcap and small cap stocks also sailed in the same boat. Sensex rose 163.04 points or 1.13% to 14,564.53 in the week ended Friday, 29 August 2008. The S&P CNX Nifty gained 32.55 points or 0.75% at 4,360 in the week.
The market started the week with marginal gains on falling crude oil prices and reports of near-normal monsoon. The market slumped later on expectations of higher weekly inflation figures. However, the market ended the week on a buoyant note as inflation fell for the first time in 28 weeks. Inflation declined to 12.40% for the week ended August 16 as against 12.63% due to lower prices of some minerals and fuels.
Gross Domestic Products (GDP) growth has declined to 7.9% in the first quarter as against 9.2% in same period of last year and 8.8% in previous quarter. These numbers were not a big disappointment for markets as numbers were in line with analysts' expectations and seemed like already factored in by markets.
In the coming week, marketmen expects that gains will be extended further however a further rise in crude oil prices may act as a spoilsport for the stock markets. Also the market will closely watch developments on the Indo-US nuclear deal in the coming week.
Technical View: Sensex made a low of around 14000 close to the 50 % retracements. Inflation and crude cues are giving a positive cue to markets for a while but the range bound markets could remain for some more time to come.
Stock to Watch: IDFC, RCOM, CENTURYTEX.
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Saturday, August 30, 2008
Wednesday, August 27, 2008
INDIAN STOCK MARKET REVIEW: 25TH AUG 2008
GLOBAL CUES TO SET THE MARKET TREND
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Weak global cues kept the market under pressure and the Indian equities closed lower for the second consecutive week. A 16-year high inflation, sudden spurt in crude oil prices above US$121/ bbl and sluggish trend across global markets kept the bulls on the sidelines. Shares in the interest rate sensitive sectors like banking, real estate and automobile witnessed selling pressure the most. The barometer index BSE Sensex declined 322.69 points or 2.19% to 14,401.49 in the week ended Friday, 22 August 2008. The S&P CNX Nifty lost 103.25 points or 2.33% at 4327.45 in the week.
Selling continued across the interest-rate sensitive sectors like real estate, bank and auto, as fresh fears emerged over a possible rate hike after inflation surged to 12.63%. The wholesale price index rose 12.63% in 12 months to 9 August 2008, above the previous week's annual rise of 12.44%. With rising inflation and possible revision in interest rates leads to fears of a slowdown in the local economy which dragged the capital goods stocks down. Power and IT stocks were the other major casualties while pharma stocks provided some cushion. Action was seen in fertilizers stocks after the finance ministry approved a cash payment of Rs220bn as subsidy for fertilizer companies.
In the coming week the market may remain under pressure after inflation recorded fastest rise in more than 16 years in early August 2008, increasing the likelihood of the Reserve Bank of India (RBI) raising interest rates again. With no major key events scheduled in the forthcoming week, the market will closely watch global stock market cues. But it may turn volatile on account of expiry of August 2008 derivatives contracts on Thursday, 28 August 2008.
Market will also closely watch developments on the Indo-US nuclear deal. A two-day meeting of the 45 countries of the Nuclear Suppliers Group (NSG) began in Vienna on Thursday, 21 August 2008. A green signal by the NSG is required for the deal to proceed to the US Congress for final ratification.
But above all how oil behaves over the next few weeks will be something which is going to affect the market in a critical way. If oil prices tend to move up again, we will get those same old fears of inflation. We will again have worries of interest rate increase, which could be much sharper than expected.
Technical View: One should now be watching 14950 and 15800 as a trigger. A rising wedge formation as shown if broken has always resulted into dips /cracks on the index. Technically supports are placed at 13700/14050. Till markets don’t give a close below 13700 it could remain in a tight range with an upside cap around 15500-15800 for some time.
For detailed analysis, stock screeners, stock datas logon to http://www.thestockworld.com
Weak global cues kept the market under pressure and the Indian equities closed lower for the second consecutive week. A 16-year high inflation, sudden spurt in crude oil prices above US$121/ bbl and sluggish trend across global markets kept the bulls on the sidelines. Shares in the interest rate sensitive sectors like banking, real estate and automobile witnessed selling pressure the most. The barometer index BSE Sensex declined 322.69 points or 2.19% to 14,401.49 in the week ended Friday, 22 August 2008. The S&P CNX Nifty lost 103.25 points or 2.33% at 4327.45 in the week.
Selling continued across the interest-rate sensitive sectors like real estate, bank and auto, as fresh fears emerged over a possible rate hike after inflation surged to 12.63%. The wholesale price index rose 12.63% in 12 months to 9 August 2008, above the previous week's annual rise of 12.44%. With rising inflation and possible revision in interest rates leads to fears of a slowdown in the local economy which dragged the capital goods stocks down. Power and IT stocks were the other major casualties while pharma stocks provided some cushion. Action was seen in fertilizers stocks after the finance ministry approved a cash payment of Rs220bn as subsidy for fertilizer companies.
In the coming week the market may remain under pressure after inflation recorded fastest rise in more than 16 years in early August 2008, increasing the likelihood of the Reserve Bank of India (RBI) raising interest rates again. With no major key events scheduled in the forthcoming week, the market will closely watch global stock market cues. But it may turn volatile on account of expiry of August 2008 derivatives contracts on Thursday, 28 August 2008.
Market will also closely watch developments on the Indo-US nuclear deal. A two-day meeting of the 45 countries of the Nuclear Suppliers Group (NSG) began in Vienna on Thursday, 21 August 2008. A green signal by the NSG is required for the deal to proceed to the US Congress for final ratification.
But above all how oil behaves over the next few weeks will be something which is going to affect the market in a critical way. If oil prices tend to move up again, we will get those same old fears of inflation. We will again have worries of interest rate increase, which could be much sharper than expected.
Technical View: One should now be watching 14950 and 15800 as a trigger. A rising wedge formation as shown if broken has always resulted into dips /cracks on the index. Technically supports are placed at 13700/14050. Till markets don’t give a close below 13700 it could remain in a tight range with an upside cap around 15500-15800 for some time.
Sunday, August 17, 2008
INDIAN STOCK MARKET WEEKLY REVIEW
WEEKLY UPDATE: 18th AUGUST 2008 - 22nd AUGUST 2008
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Market lost the steam after a five day rally to edge lower in truncated week due to poor industrial growth, fall in car sales after 33-months and rebound in crude oil prices from a 3-month low. The sentiment turned bearish after the Prime Minister’s Economic Advisory Committee (EAC) trimmed its forecast for GDP growth in FY09 to 7.7%. It also expects inflation to shoot up to 13% shortly before it softens. The BSE Sensex and the S&P CNX Nifty settled below their psychologically important levels of 15,000 and 4,500 respectively. The barometer index BSE Sensex declined 443.64 points or 2.92% to 14,724.18 in the week ended Thursday, 14 August 2008. The S&P CNX Nifty lost 98.80 points or 2.18% at 4,430.70 in the week.
Interest-rate sensitive sectors bore the brunt of the selling after EAC indicated a slowdown in GDP growth and its expectations of higher inflation. Also, concerns about shrinking economic growth in key global economies and continued financial sector woes had an adverse impact on the sentiment. Slowdown in industrial production hit the capital goods stocks. Metal and power stocks were the other major losers. IT stocks bucked the negative trend to close higher after the Rupee depreciated to 42.90 against the US Dollar.
Inflation had hit 12.44% and remains a major concern for the central bank. High inflation will mean that tight monetary policy stance by the central bank may continue. On 29 July 2008, the Reserve Bank of India (RBI), at its quarterly policy review late month raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation and dampen inflationary expectations. RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%. And this relentless monetary tightening by the RBI has finally started to catch up with industrial growth. A slowdown in the manufacturing sector pulled down India's industrial growth in June 2008 to 5.4% from 8.9% a year ago. This is however higher than 4.1% growth as per revised figures in May 2008. The index of industrial production (IIP) went up 5.2% in Q1 June 2008 compared to 10.3% in Q1 June 2007.
In the coming week, sentiment is likely to remain edgy in the near term dampened by a series of negative news. Car sales recorded a dip in sales for the first time in 33 months as interest rates, inflationary pressures and hike in fuel prices dented demand. Passenger car sales declined 1.7% to 87,724 units in July 2008 over July 2007, according to data released by the Society of Indian Automobile Manufacturers. With no key events scheduled in the forthcoming week, the Indian stock market will closely watch global stock markets for direction. However, on the positive side, a further fall in crude oil prices may boost the sentiment. Crude oil prices have declined sharply from record high $147.27 a barrel hit on 11 July 2008. US crude settled below $114 on Friday, 15 August 2008 due to stronger US dollar.
From 21st August, NSE will introduce 39 new stocks to the F&O segment. They are ABG Shipyard, Akruti City, Asian Paints, Balaji Telefilms, Concor, Core Projects, Deccan Chronicle, Dish TV, Everonn, Firstsource, GSPL, GTL Infrastructures, HCL Infosystems, Indiabulls Real Estate, ICSA, KLG Systel, KS Oils, MIC Electronics, Mindtree Consulting, Mercator Lines, Monnet Ispat, MRF, Nava Bharat Venturs, Noida Toll, Opto, Orbit Corp, Prism Cem, PTC, Reliance Ind Infra, Sintex, SREI, Thermax, Torrent Power, TV18, UCO Bk, UTV, Voltamp, Walchandnagar.
Marketmen will also watch the review of PN notes by SEBI. It is anticipated that SEBI may extend the period for unwinding PNs, on underlying derivatives from 18 months to 24 months.
Technical View: Sensex has given a weekly close below 15050 and broken the bearish Rising Wedge pattern. Therefore, it can test the previous low of 12500 again in the coming days as a measured objective of the Wedge. However, multiple support levels exist for Sensex at the region 14400-14600. below that 14000-14050 and 13650-13700 are the levels to watch. For Nifty, 4370-4390 may provide a bit of cushion below that levels are 4320/ 4220/4150/4120.
From the F&O perspective, only Nifty 3900 put saw any significant buildup. On the other hand, 4500 and 4600 calls have been written a lot. So it looks like that market participants are far more interested to write calls as if they are expecting a level of 3900 in this expiry itself.
VIX has taken support and bouncing back to higher levels means markets are going to be choppy and volatile.
For latest stock market updates, stock analysis, stock screeners and lot more login to http://www.thestockworld.com
Market lost the steam after a five day rally to edge lower in truncated week due to poor industrial growth, fall in car sales after 33-months and rebound in crude oil prices from a 3-month low. The sentiment turned bearish after the Prime Minister’s Economic Advisory Committee (EAC) trimmed its forecast for GDP growth in FY09 to 7.7%. It also expects inflation to shoot up to 13% shortly before it softens. The BSE Sensex and the S&P CNX Nifty settled below their psychologically important levels of 15,000 and 4,500 respectively. The barometer index BSE Sensex declined 443.64 points or 2.92% to 14,724.18 in the week ended Thursday, 14 August 2008. The S&P CNX Nifty lost 98.80 points or 2.18% at 4,430.70 in the week.
Interest-rate sensitive sectors bore the brunt of the selling after EAC indicated a slowdown in GDP growth and its expectations of higher inflation. Also, concerns about shrinking economic growth in key global economies and continued financial sector woes had an adverse impact on the sentiment. Slowdown in industrial production hit the capital goods stocks. Metal and power stocks were the other major losers. IT stocks bucked the negative trend to close higher after the Rupee depreciated to 42.90 against the US Dollar.
Inflation had hit 12.44% and remains a major concern for the central bank. High inflation will mean that tight monetary policy stance by the central bank may continue. On 29 July 2008, the Reserve Bank of India (RBI), at its quarterly policy review late month raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation and dampen inflationary expectations. RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%. And this relentless monetary tightening by the RBI has finally started to catch up with industrial growth. A slowdown in the manufacturing sector pulled down India's industrial growth in June 2008 to 5.4% from 8.9% a year ago. This is however higher than 4.1% growth as per revised figures in May 2008. The index of industrial production (IIP) went up 5.2% in Q1 June 2008 compared to 10.3% in Q1 June 2007.
In the coming week, sentiment is likely to remain edgy in the near term dampened by a series of negative news. Car sales recorded a dip in sales for the first time in 33 months as interest rates, inflationary pressures and hike in fuel prices dented demand. Passenger car sales declined 1.7% to 87,724 units in July 2008 over July 2007, according to data released by the Society of Indian Automobile Manufacturers. With no key events scheduled in the forthcoming week, the Indian stock market will closely watch global stock markets for direction. However, on the positive side, a further fall in crude oil prices may boost the sentiment. Crude oil prices have declined sharply from record high $147.27 a barrel hit on 11 July 2008. US crude settled below $114 on Friday, 15 August 2008 due to stronger US dollar.
From 21st August, NSE will introduce 39 new stocks to the F&O segment. They are ABG Shipyard, Akruti City, Asian Paints, Balaji Telefilms, Concor, Core Projects, Deccan Chronicle, Dish TV, Everonn, Firstsource, GSPL, GTL Infrastructures, HCL Infosystems, Indiabulls Real Estate, ICSA, KLG Systel, KS Oils, MIC Electronics, Mindtree Consulting, Mercator Lines, Monnet Ispat, MRF, Nava Bharat Venturs, Noida Toll, Opto, Orbit Corp, Prism Cem, PTC, Reliance Ind Infra, Sintex, SREI, Thermax, Torrent Power, TV18, UCO Bk, UTV, Voltamp, Walchandnagar.
Marketmen will also watch the review of PN notes by SEBI. It is anticipated that SEBI may extend the period for unwinding PNs, on underlying derivatives from 18 months to 24 months.
Technical View: Sensex has given a weekly close below 15050 and broken the bearish Rising Wedge pattern. Therefore, it can test the previous low of 12500 again in the coming days as a measured objective of the Wedge. However, multiple support levels exist for Sensex at the region 14400-14600. below that 14000-14050 and 13650-13700 are the levels to watch. For Nifty, 4370-4390 may provide a bit of cushion below that levels are 4320/ 4220/4150/4120.
From the F&O perspective, only Nifty 3900 put saw any significant buildup. On the other hand, 4500 and 4600 calls have been written a lot. So it looks like that market participants are far more interested to write calls as if they are expecting a level of 3900 in this expiry itself.
VIX has taken support and bouncing back to higher levels means markets are going to be choppy and volatile.
Sunday, August 10, 2008
INDIAN STOCK MARKET WEEKLY REVIEW
WEEKLY MARKET OUTLOOK: 10th AUGUST 2008
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A host of positive factors like sharp fall in crude oil prices, recovery in rainfall and buying by foreign institutional investors helped Sensex close above crucial 15,000 mark. For the week ended August 9, the Sensex settled at an eight-week high of 15,167.82, a net rise of 511.13 points (3.49%) from the previous weekend's close. The Nifty gained 115.95 points (2.63 percent) to close the week at 4,529.50 from last weekend's close.
Crude oil prices declined sharply from a record high $147.27 a barrel hit on 11 July 2008. Oil held near $115 a barrel on weekend giving a positive breadth for the equity market. India's monsoon was above average for the first week in August 2008, helping ease a dry spell that had threatened to delay sowing of crops including rice and cotton.
Foreign institutional investors (FII)’s bought shares worth Rs 1527.90 in the first few days of August 2008 (till 7 August 2008). FIIs sold shares worth Rs 25774.20 in the calendar year 2008, till 7 August 2008. Mutual funds sold shares worth Rs 286.10 in the month of August 2008 (till 7 August 2008).
Amid some positive factors, inflation still remains a major concern for the central bank. Inflation based on the wholesale price index rose 12.01% in 12 months to 26 July 2008, slightly above the previous week's annual rise of 11.98%.
Reserve Bank of India (RBI) on 29 July 2008, raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation and dampen inflationary expectations. RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%. The central bank left its reverse repo and bank rates unchanged. Responding to the RBI's monetary tightening, top lenders HDFC and ICICI Bank and a number of state run bank have raised interest rates.
In the coming week, the market will take cues from June 2008 industrial production figures which the government will release on Tuesday, 12 August 2008. Falling crude oil prices and improvement in south west monsoon will provide some relief to investors. Rising inflation remains a major worry for the markets in the medium term. Marketmen will keenly watch the development of India’s nuclear deal with US. The Board of Governor of the International Atomic Energy Agency (IAEA) on 1 August 2008 unanimously adopted the India-specific safeguards agreement, a key step in operationalisation of the Indo-US nuclear deal.
For latest stock market updates, stock analysis, stock screeners and lot more login to http://www.thestockworld.com
A host of positive factors like sharp fall in crude oil prices, recovery in rainfall and buying by foreign institutional investors helped Sensex close above crucial 15,000 mark. For the week ended August 9, the Sensex settled at an eight-week high of 15,167.82, a net rise of 511.13 points (3.49%) from the previous weekend's close. The Nifty gained 115.95 points (2.63 percent) to close the week at 4,529.50 from last weekend's close.
Crude oil prices declined sharply from a record high $147.27 a barrel hit on 11 July 2008. Oil held near $115 a barrel on weekend giving a positive breadth for the equity market. India's monsoon was above average for the first week in August 2008, helping ease a dry spell that had threatened to delay sowing of crops including rice and cotton.
Foreign institutional investors (FII)’s bought shares worth Rs 1527.90 in the first few days of August 2008 (till 7 August 2008). FIIs sold shares worth Rs 25774.20 in the calendar year 2008, till 7 August 2008. Mutual funds sold shares worth Rs 286.10 in the month of August 2008 (till 7 August 2008).
Amid some positive factors, inflation still remains a major concern for the central bank. Inflation based on the wholesale price index rose 12.01% in 12 months to 26 July 2008, slightly above the previous week's annual rise of 11.98%.
Reserve Bank of India (RBI) on 29 July 2008, raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation and dampen inflationary expectations. RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%. The central bank left its reverse repo and bank rates unchanged. Responding to the RBI's monetary tightening, top lenders HDFC and ICICI Bank and a number of state run bank have raised interest rates.
In the coming week, the market will take cues from June 2008 industrial production figures which the government will release on Tuesday, 12 August 2008. Falling crude oil prices and improvement in south west monsoon will provide some relief to investors. Rising inflation remains a major worry for the markets in the medium term. Marketmen will keenly watch the development of India’s nuclear deal with US. The Board of Governor of the International Atomic Energy Agency (IAEA) on 1 August 2008 unanimously adopted the India-specific safeguards agreement, a key step in operationalisation of the Indo-US nuclear deal.
Sunday, August 3, 2008
INDIAN STOCK MARKET UPDATES
WEEKLY MARKET OUTLOOK: 4th AUGUST 2008
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With the Q1 June 2008 earnings season over, global developments are likely to come back as the driving force of Indian stock market after a brief rally seen over the past few days on domestic factors like expectations for economic reforms being taken forward. The market will now closely watch movement in crude oil prices and global stock markets. A further slide in oil price may boost investor confidence in the short term. The marketmen see falling crude oil prices as a positive cue for the bourses, but expect persisting concerns for the US economy to continue to limit any major upsurge here. On the domestic front, the bullish investors are pinning their hopes on some boost from the progress in the proposed India-US nuclear deal, besides some support from banking sector, especially on expectations for progress on some key financial sector reform bills.
The highly volatile July 2008 series of derivative contracts expired on Thursday, 31 July 2008 with poor rollovers. As per reports, Nifty rollover of positions from July 2008 series to August 2008 series stood at 65.05% as compared to 70.07% in the previous series. Even in single stock futures, rollovers were relatively muted at 79.19% compared to 82.05% in the previous series.
Stubbornly high inflation still remains a concern. Again, the market trend is likely to dictated by the progress of the monsoon. India's annual monsoon rains from 17 to 23 July were 33% below the long-term average. Rainfall since 1 June 2008 has been 2% below the same average.
Stocks of the public sector units will continue to remain in focus as there are expectations that the government may push forward some economic reforms, which were stalled over the past four years due to opposition from Left parties. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
For latest stock market updates, stock analysis, stock screeners and lot more login to http://www.thestockworld.com
For latest stock market updates, stock analysis, stock screeners and lot more login to http://www.thestockworld.com
With the Q1 June 2008 earnings season over, global developments are likely to come back as the driving force of Indian stock market after a brief rally seen over the past few days on domestic factors like expectations for economic reforms being taken forward. The market will now closely watch movement in crude oil prices and global stock markets. A further slide in oil price may boost investor confidence in the short term. The marketmen see falling crude oil prices as a positive cue for the bourses, but expect persisting concerns for the US economy to continue to limit any major upsurge here. On the domestic front, the bullish investors are pinning their hopes on some boost from the progress in the proposed India-US nuclear deal, besides some support from banking sector, especially on expectations for progress on some key financial sector reform bills.
The highly volatile July 2008 series of derivative contracts expired on Thursday, 31 July 2008 with poor rollovers. As per reports, Nifty rollover of positions from July 2008 series to August 2008 series stood at 65.05% as compared to 70.07% in the previous series. Even in single stock futures, rollovers were relatively muted at 79.19% compared to 82.05% in the previous series.
Stubbornly high inflation still remains a concern. Again, the market trend is likely to dictated by the progress of the monsoon. India's annual monsoon rains from 17 to 23 July were 33% below the long-term average. Rainfall since 1 June 2008 has been 2% below the same average.
Stocks of the public sector units will continue to remain in focus as there are expectations that the government may push forward some economic reforms, which were stalled over the past four years due to opposition from Left parties. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
For latest stock market updates, stock analysis, stock screeners and lot more login to http://www.thestockworld.com
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