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from Expert Zone:

How high will the Sensex go?

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A bronze bull sculpture is seen as an employee walks out of the Bombay Stock Exchange building in MumbaiSince April, the stock market has been in a frenzy after a long period of utter gloom. In quick succession, the Sensex jumped month after month to cross 26,000 on July 7. This was not mere euphoria created by the election of the Narendra Modi government, with a single-party majority in the Lok Sabha after a long time.

The market had to make up a lot for lost time. In the last three years of the Congress-led government, the Sensex lost 6 percent. Even if the Sensex had risen at the same pace as the rate of interest, it would have crossed 26,000 last year. The build-up of investor confidence by Modi during the campaign, and subsequently after the election, was instrumental in reversing and accelerating the lethargic pace of the Sensex.

In four months, the Sensex climbed 16 percent. What is amazing is a fifth of that jump was accomplished in a single day on May 13.

from Expert Zone:

India Markets Weekahead: Tough for Nifty to climb above 7,800

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Indian markets were unaffected by the week's international developments, with some help from encouraging domestic macro data and a pep talk by Finance Minister Arun Jaitley in post-budget discussions.

The Nifty recovered from the previous week's losses, closing 2.67 percent up at 7664. Positive IIP data was followed by benign inflation at 5.43 percent, a four-month low. Monsoon rains, which had been playing truant, recovered substantially with the deficit shrinking to 15 percent below average last week and covering the entire country.

from Expert Zone:

Budget strikes the right chord on reviving investment

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerPatient, consistent baseline play rather than aggressive serve and volley -- that about sums up the Narendra Modi-led government’s maiden budget.

from Expert Zone:

Budget 2014/15 reveals priorities, sets the stage

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The new Narendra Modi government rides on a long wishlist of policies and reforms, with limited resources. Budget 2014/15, as expected, reveals the government’s priorities in the near and medium term.

Arun Jaitley poses as he leaves his office to present the union budget for the 2014/15 fiscal year in New DelhiThe inflation moderation imperative overshadows near-term headline growth desires, manifested in aggressive (albeit challenging) fiscal deficit targets. The projected fiscal deficit of 4.1 percent (3.6 percent of GDP in FY16) versus the 4.6 percent recorded in FY14, is in line with expectations. The reduction in the budget deficit is driven by hoped-for revenue growth rather than depressed spending growth.

from Expert Zone:

India Markets Weekahead: ‎Book out of high-beta stocks

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerThe Narendra Modi government presented its maiden budget on Thursday. Although the budget was welcomed by industry leaders, the market meltdown seems to be telling a different story, with the Nifty posting its biggest weekly loss in 15 months.

Should it have been a path-breaking budget or is it prudent to build the economy brick-by-brick by walking the middle path? The much hyped "bitter pill" turned out to be a "bland" one.

from Expert Zone:

‎India Markets Weekahead: Correction could follow budget week

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Last week's robust pre-budget rally belied expectations, with the Nifty closing up more than 3 percent at a record high of 7,751‎. Automobile sales, manufacturing PMI as well as services PMI showed an uptick. The Iraq turmoil seems to have taken a back seat with oil prices receding from a nine-month peak. A rally in world markets, with life highs for the DJIA and S&P 500, also aided sentiment.

India's fiscal deficit in the first two months has already touched 45.6 percent of the full-year target. Though this would have been a negative indicator, the markets welcomed Finance Minister Arun Jaitley’s remarks about focusing on fiscal consolidation against "mindless populism".

from India Insight:

Stock market glitches in India over the past few years

India's stock market, like its peers across the world, is no stranger to sudden trading halts due to technical glitches. On Thursday, India’s second-biggest exchange operator BSE halted trading across all its segments due to a network outage. Trading on the NSE bourse was not affected.

The three-hour outage was the longest in recent memory and follows three earlier outages in a year that has seen stocks scale fresh peaks on expectations of economic revival from a new government.

from India Insight:

Markets this week: ITC, Infosys top Sensex losers

By Sankalp Phartiyal and Ankush Arora

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai May 13, 2014. REUTERS/Danish Siddiqui/FilesThe benchmark BSE Sensex fell in three of five sessions this week, as higher crude prices hurt sentiment and the cabinet’s decision to delay a hike in gas prices disappointed investors. Caution also prevailed ahead of the June derivatives’ expiry on Thursday and fears of more violence in Iraq prompted investors to pare positions.

A Reuters poll on Thursday forecast the 30-share Sensex hitting 27,750 points by the end of December, following a brief correction after the budget.

from India Insight:

Markets this week: Mahindra and Mahindra, RIL top Sensex losers

By Ankush Arora and Sankalp Phartiyal

The BSE Sensex and Nifty, India’s main stock indexes, both fell 0.5 percent this week as worries over escalating Iraq tensions, a weak domestic monsoon and profit-taking weighed on sentiment.

On Friday, global oil prices inched towards a nine-month high on increased risks of supply disruption from Iraq. Investors fear spiraling crude prices and a weak monsoon could add to inflation woes and hurt India’s current account deficit.

from Expert Zone:

India Markets Weekahead: Pre-budget rally may be muted

A man looks at a screen across the road displaying the election results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai May 16, 2014. REUTERS/Danish Siddiqui/Files(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty touched a new high of 7,700 before cracking on Friday to slip about 0.5 percent for the week. This was primarily triggered by the unrest in Iraq and the subsequent rise in crude prices.

The markets were also overbought aided by a relentless rally since May 9‎, with the CNX Nifty climbing about 16 percent, S&P BSE Midcap Index rising 26 percent and the S&P BSE Small cap index jumping 35 percent. The last one-month saw 115 multi-baggers with 92 percent of traded stocks gaining during the period. The probability of picking a loser was minimal. It seemed making money had never been so easy.

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